Two-wheeler, passenger vehicle sales to rise on GST cut: Crisil Ratings

In April–August of the current fiscal, two-wheeler volumes were flat at 0–1 per cent growth, while PV sales declined 3–4 per cent.

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Two-wheeler sales are expected to grow 5–6 per cent this fiscal, while passenger vehicles (PVs) may see a 2–3 per cent rise, aided by the GST Council’s move to rationalise tax rates on automobiles, according to Crisil Ratings’ new report.The GST Council on Wednesday approved a two-rate structure of 5 per cent and 18 per cent, effective 22 September 2025, down from the earlier higher slabs of 12 per cent and 28 per cent. The decision, the agency said, would provide a timely boost to demand.“With the GST cut fully passed on, vehicle prices are expected to drop 5–10 per cent — translating into savings of ₹30,000–60,000 on small PVs and ₹3,000–7,000 on two-wheelers,” said Anuj Sethi, Senior Director, Crisil Ratings.In April–August of the current fiscal, two-wheeler volumes were flat at 0–1 per cent growth, while PV sales declined 3–4 per cent. The revised GST is expected to lift demand by around 200 basis points for two-wheelers and 100 basis points for PVs, Crisil said.

GST2.0

Under the new regime, rates on small PVs, two-wheelers up to 350 cc, commercial vehicles and three-wheelers will drop to 18 per cent from 28 per cent. Mid and larger PVs will see a reduction of 3–7 per cent, while tractors will move to 5 per cent and 18 per cent, from 12 per cent and 28 per cent earlier. For commercial vehicles, the cut is expected to cushion the cost push from the mandatory AC cabin rule that takes effect from October 2025.Motorcycles above 350 cc, however, will become costlier, as the levy rises to a special rate of 40 per cent from the current 31 per cent, including compensation cess.