For both automakers and consumers, the Indian government's GST Bachat Utsav has been a pleasant respite. In the new tax system:

• Small automobiles and two-wheelers under 350cc are now subject to 18% GST instead of 28%.

• After the cess was removed, the tax on large automobiles and SUVs, which formerly exceeded 50%, is now effective at 40%.

The larger "GST 2.0" change, which aims to streamline tax slabs and boost domestic consumption across all sectors, includes this action.

Auto Sales Experience a Festive Increase

The reform appears to be effective based on preliminary data. In Madhya Pradesh, for example, car sales increased by 55% and two-wheeler sales by 24% during the Navratri festival, a 43% increase.

For purchasers, this results in substantial cost savings:

• Automobiles: ₹30,000 to ₹1.5 lakh discount, depending on size and model.

• Two-wheelers: often less expensive at ₹7,000 to ₹15,000.

The market has seen a sharp increase in auto stocks. Following the announcement, firms like Maruti Suzuki and Eicher Motors saw gains of over 20% on the Nifty Auto Index.

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