By Admin 
Union Finance Minister Nirmala Sitharaman has recently announced a new tax structure, in which major changes have been made for the automobile industry. At first glance, this news may seem expensive to common customers because GST has been increased from 28% to 40% on large and luxury cars. But the real relief is that now these cars will not be put separately, which will make vehicles like Mercedes-Benz and Fortuner cheaper and the luxury vehicles of companies like BMW can be slightly cheaper than before.
Why will luxury vehicles be cheap?
- In earlier tax arrangements, Ice cars were applied from 17% to 22% in addition to 28% GST. The effect of this was that the total tax burden reached 45% to 50%. The new system will now have only 40% GST and there will be no cess. That is, the total tax burden will decrease and the price of trains will decrease slightly. This change will be applicable from 22 September 2025, before the fine festive season, when sales are the highest in the automobile sector.
Not only luxury cars, these vehicles are also affected
- The benefit of the new GST system will not be limited to luxury cars, but it includes many more changes. Now bus, trucks and ambulances will levy 18% GST, which was 28% earlier. The rate of 18% will also be applicable on auto parts, irrespective of their HS code. Three vehicles will also come in this tax slab. In this way, this decision will give relief not only to private vehicles but also to commercial vehicle industry.
What did Mercedes and Audi say?
- MD and CEO Santosh Iyer of Mercedes-Benz India called the decision a progressive step. He said that the government has heard the long -standing demand, which will increase the consumption and will speed up the automobile industry. At the same time, Audi India chief Balbir Singh Dhillon described it as positive for the development of the industry and said that maintaining a low rate for electric vehicles is a welcome step. This will enable the EV portfolio and more customers.
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