Tata Motors announced on Friday that it will reduce prices across its passenger vehicle range by up to ₹1.45 lakh, effective from September 22, in line with the newly approved GST 2.0 regime.
The company stated that it intends to pass on the full benefit of the tax reforms directly to customers, aiming to make cars more affordable amid sluggish sales.
The recently implemented GST 2.0 reforms have simplified and reduced tax rates for the automobile sector.
The GST Council consolidated the complex tax structure into two slabs, 5% and 18%, while removing the additional cess on vehicles.
Small cars with engine capacities up to 1,200 cc for petrol, LPG, and CNG, and 1,500 cc for diesel, will now attract 18% GST, down from the earlier 28% plus cess, lowering the cost of entry-level models.
Larger cars and SUVs, previously taxed at effective rates of 43% to 50%, will now face a flat 40% GST, simplifying pricing and reducing the overall tax burden.
Industry Expectations
Experts believe that the combination of lower prices and a simplified tax structure could stimulate vehicle sales significantly.
The reforms may also encourage credit-driven purchases through banks and NBFCs, particularly in semi-urban and rural markets, helping the automobile industry recover momentum.
Tata Motors’ proactive approach in passing on these benefits reflects a broader trend in the Indian automobile sector, where manufacturers are aligning pricing strategies with regulatory changes to maintain competitiveness and expand market reach.
With the GST 2.0 reforms coming into effect and Tata Motors leading the charge on price reductions, industry observers expect a positive impact on consumer sentiment and increased demand in the coming months, signalling a potential boost for India’s automotive market.
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