Domestic Vehicle Sales Jump Over 40 Lakh Units Following GST Reduction

(MENAFN- KNN India) New Delhi, Dec 10 (KNN) The reduction in Goods and Services Tax (GST) on automobiles and transportation equipment has led to a significant increase in domestic vehicle sales, according to a statement by Minister of Heavy Industries, H.D. Kumaraswamy, in the Lok Sabha.

Surge in Vehicle Sales

Data from the Vahan portal shows that total vehicle sales in October 2025 rose to 40,55,559 units, marking a 41.3 percent increase compared to 28,70,120 units sold in October 2024.

GST Rationalisation and Price Reduction

The GST on small passenger vehicles, three-wheelers, motorbikes up to 350 cubic capacities, commercial vehicles, and automobile parts has been rationalised from 28 percent to 18 percent. This reduction has lowered vehicle prices, leading to higher domestic sales.

Impact on Manufacturing Competitiveness

Higher sales volumes are expected to help manufacturers achieve economies of scale in local production, boosting the global competitiveness of Indian automobile manufacturing.

Original Equipment Manufacturers (OEMs) have reportedly passed on the benefits of the reduced GST to customers, further driving demand.

The GST cut is seen as a key measure to strengthen domestic manufacturing, stimulate consumption, and enhance the competitiveness of India's automotive sector globally.

Impact on MSMEs

The GST reduction in the automotive sector benefits MSMEs involved in vehicle manufacturing, auto parts production, and allied services by lowering costs, increasing demand, and improving cash flow.

Higher sales volumes enable smaller suppliers to scale operations, achieve better production efficiency, and integrate more effectively into the domestic and global automotive supply chain.

(KNN Bureau)

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