NEW DELHI– The government’s new three-slab Goods and Services Tax (GST) structure—5 per cent, 18 per cent and 40 per cent—could deliver major savings for automobile buyers, with vehicle prices across categories expected to drop by as much as 8.5 per cent, according to a report released on Thursday.
Crisil Intelligence said entry-level hatchbacks, premium hatchbacks, compact sedans, and sub-compact SUVs with petrol engines under 1,200 cc or diesel engines under 1,500 cc are likely to see the steepest cut, with prices declining around 8.5 per cent.
Large sedans, compact SUVs, mid-SUVs, and MPVs under 1,500 cc are projected to become cheaper by about 3.5 per cent, while premium SUVs and MPVs with larger engines could see a reduction of nearly 6.7 per cent.
Two-wheelers will also benefit, with prices across most categories expected to fall about 7.8 per cent. However, premium models with engines above 350 cc may buck the trend, becoming costlier by roughly 6.9 per cent.
The report added that tractors and fuel-cell vehicles, including hydrogen-powered models, would see a decline of 6.3 per cent, while three-wheelers, light commercial vehicles (LCVs), medium and heavy commercial vehicles (MHCVs), and buses could fall around 7.8 per cent.
Notably, the estimates do not factor in possible pass-through savings from automotive component makers to original equipment manufacturers. All automotive components are now under the 18 per cent GST slab, a move expected to lower the cost of parts previously taxed at 28 per cent by nearly 7.8 per cent, benefiting the aftermarket segment.
From a domestic sales perspective, Crisil projected marginal single-digit growth in passenger vehicles during FY26, stronger single-digit growth in two-wheelers, steady 4–7 per cent growth in tractors, and flattish to slightly positive growth for commercial vehicles. Electric vehicles will continue to be taxed at 5 per cent, unaffected by the rate revisions. (Source: IANS)
