The implementation of new Goods and Services Tax (GST) reforms on September 22, 2025, has ignited a surge in the Indian auto industry, coinciding with the auspicious start of the festive season. Automakers are reporting record sales and bookings as a result of passing on the tax benefits to consumers.

Maruti Suzuki

Maruti Suzuki, India's largest car manufacturer, has experienced a phenomenal surge in customer response. The company recorded 80,000 customer inquiries and delivered approximately 25,000 to 30,000 cars on the first day of the GST roll-out. Since announcing revised prices on September 18, with reductions of up to Rs 1.30 lakh across models, the company has received 75,000 bookings, averaging nearly 15,000 per day, which is 50% higher than usual. Demand has been especially strong for small cars, with bookings growing by nearly 50%. Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki, commented that the customer response has been unprecedented, something not witnessed in the last 35 years. The price cuts span across various models, including entry-level hatchbacks like Alto K10 and WagonR, premium models such as Baleno and Swift, and SUVs including Brezza and Grand Vitara.

Hyundai Motor India

Hyundai Motor India also reported strong momentum, achieving its highest single-day performance in five years with 11,000 dealer billings on the first day. The GST reduction on small cars and SUVs to 18% from 28% has significantly lowered prices, with models like the Tucson receiving cuts of up to Rs 2.39 lakh and the Alcazar reduced by up to Rs 72,500. Tarun Garg, Whole-Time Director & COO of Hyundai Motor India, attributed this success to the auspicious start of Navratri, amplified by the momentum from GST 2.0 reforms.

Tata Motors

Tata Motors has also witnessed strong customer footfalls and bookings. To further boost sales, the company has rolled out festive offers worth up to Rs 2 lakh, depending on the model. Entry-level models like Tiago and Tigor now offer benefits of Rs 1.20 lakh and Rs 1.11 lakh respectively, while higher-end SUVs such as the Harrier and Safari get up to Rs 1.94 lakh and Rs 1.89 lakh in total savings. The Nexon sees the highest benefit at up to Rs 2 lakh. Tata Motors recorded 10,000 deliveries alongside over 25,000 customer enquiries on Navratri's opening day.

GST Rate Reductions

The GST Council has reduced the GST structure from four slabs (5%, 12%, 18%, 28%) to two main rates: 5% (merit rate) and 18% (standard rate), along with a 40% special rate for sin/luxury goods. For buses with a seating capacity of 10 plus persons, GST has been reduced from 28% to 18%. The majority of components used for manufacturing motorcars and motorbikes have also been reduced to 18%. For two-wheelers, including bikes up to 350cc, the GST rate has been reduced from 28% to 18%. Tractors, previously taxed at 12%, will now be taxed at 5%, and tractor tyres and parts have also been brought down from 18% to 5%.

Industry Impact

Industry analysts expect the GST-driven price correction to significantly lift demand in the passenger vehicle segment. The Federation of Automobile Dealers Associations (FADA) noted increased footfalls across dealerships, as buyers rushed to take advantage of the reduced rates. CarTrade tech's platforms, CarWale and BikeWale, recorded their highest-ever single-day traffic, with a 74% growth compared to the first day of Navratri last year and a 60% increase over the August 2025 daily average. The used-car market has also seen a surge, with Cars24 reporting a 400% increase in car deliveries. Dealers have welcomed the next-generation GST reforms, stating that the measures will boost purchasing power and give a significant push to the economy.