Auto Sector Diwali Bonanza: Diwali 2025 is Coming with bumper bonus to Indians specially those individuals who are planning to purchase a new vehicle in their family this Diwali. The Government of India have officially announced to revise the GTS slabs, which will directly affect premium and luxury category items under the 28% GST slab.
After implementing the new GST reformation bill, all the products under the 28% GST including vehicles will fall under the 18% GST category. So vehicle owners will receive a huge benefit by Diwali 2025 while purchasing a new vehicle. So if you are also searching two wheeler or four wheeler vehicles with bumper off then you can read this article which will help you to understand the new vehicle rates after dropping GST from 28% to 18% in Diwali.
Bumper Bonus To Vehicle Owners
Prime Minister Narendra Modi has officially declared to introduce new GST Information Bill to reduce 4 slab base system to 2 slab system. The date of the implementation have also been announced during the speech on 79 Independence Day at Red Fort Delhi which is scheduled by Diwali 2025.
Currently Indian citizens are required to pay 28% GST on the ex showroom price of the Two wheeler or four wheeler. 28% GST is paid by the individual to avail any luxury service or purchase any luxury items in the country. Since all the automobile items are registered under the luxury items, so they need to pay additional 28% GST to the government while purchasing it from the showroom.
But as per the latest announcement by the Prime Minister Narendra Modi, GST rates on luxury item categories will drop from 28% to 18% by Diwali 2025. So it will save approximately 10% of the tax and you can use it to customise your vehicle or save the amount accordingly.
How Automobile Sector Will Be Affected?
Currently the automobile sector is divided into 3 categories including EV automobile sector, Hydrogen fuel cell vehicles and Internal combustion engine- ICE. All the vehicles under the ICE are lying under the luxury vehicles including two wheeler passenger vehicle, three wheelers and commercial vehicles. So if any individual is using the petrol or diesel engine based vehicle then they will pay 28% additional GST to the government.
However currently the EV vehicle culture is growing in India, government is also promoting to purchase EV vehicles and charging only 5% GST to all the automobile products under the EV sector. If you are going with hydrogen fuel cell vehicle- FCEV, then you will need to pay 12% GST to the government to use the product accordingly.
The EV sector products will not be affected in this GST rate reformation, but all the vehicles under the hydrogen fuel cell vehicle and internal combustion engine vehicle will get benefits. The new GST rates are expected to be scheduled at 5% and 18% only. So all the products with 18% and 28% GST in current will automatically fall under the 18% GST in new reformation. Apart from this products under the 12% GST criteria may be adjusted with 5% or 18% according to the government criteria.
What is the New GST Rate?
Currently GST rates are working with a four slabs system. However the 0% GST slab is also included in the current GST rate. It is imposed to all the essential items including fresh fruits, vegetable, milk, eggs, educational services and Healthcare services. The 5% GST is charged for multiple items which are applying to Mass consumption, These are including not necessary but demanding food products including packaged foods, spices, tea and coffee, coal, footwear and other multiple products.
The next slab is 12% GST which is imposed to all the process foods, mobile phones, computers and other electronic items. It is charged to all the products which are considered critical for survival but are widely used. 18% GST is the standard rate of the GST in India where most of the products including beauty products, oil, soap, toothpaste, banking services and other service sector products are included.
The 28% GST is charged for basically to categories including luxury items and sin products. Luxury items are the items which are not essential to use but individuals want to upgrade their life skill by using it including air conditioner, refrigerator, motorcycle and all vehicles, and other items. Apart from this items which are dangerous for health to consume including cigarette, tobacco and other alcoholic items are lying under the sin category for 28% GST.
Conclusion
The Finance ministry has also discussed the new GST slabs which are expected to implement in the new GST rates after the revision in it. The government is working to complete their commitment and provide minimum GST facility by Diwali 2025 so Indians can purchase gifts including vehicles for their belongings with bumper offers accordingly.
