Oct 23, 2025 – The recent reduction in Goods and Services Tax (GST) has provided significant relief to buyers - from everyday items to cars and bikes - and has particularly acted as a lifeline for the country’s automobile industry. The tax cut has led to an unprecedented surge in car sales. Initial industry estimates indicate that passenger-vehicle makers have seen between 15% and 35% sales growth during this period. This surge was driven not only by GST reforms but also by Repo Rate relief and buoyant consumer sentiment.

The government implemented new GST rates on September 22, reducing GST on small cars from 28% to 18% and removing the cess. Meanwhile, for luxury cars, the GST rate was increased from 28% to 40%, but the cess was removed, leading to a price drop of up to 10% for luxury cars as well. As a result, nearly 7 lakh cars were sold in the country within just one month, which is double the sales in normal months.

India’s leading automobile manufacturers have recorded their best Diwali season ever, during the period between Navratri and Diwali. Maruti Suzuki sold 3.5 lakh cars between September 22 and October 18. The company sold 13,500 cars daily and, as per reports, received more than 4.5 lakh bookings within one month of the GST cut implementation with retail sales touching a record 325,000 units. It also saw its best-ever Dhanteras, with more than 51,000 units being sold in a day. Hyundai Motor India saw retail sales go up 30% YoY, averaging around 2,500 cars a day. Tata Motors delivered more than 1,00,000 cars during this period, marking a 33% increase in sales compared to the previous year.

With Media Inputs

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