The Ministry of Heavy Industries answered Lok Sabha Starred Question No. 131 on December 9, 2025, posed by Shri Ramvir Singh Bidhuri, regarding the impact of GST reduction on the automobile and transportation equipment sector.
According to data from the Vahan portal, there was a 41.3% increase in the total number of vehicles sold in October 2025 compared to October 2024. Specifically, 4,055,559 vehicles were sold in October 2025, compared to 2,870,120 vehicles in October 2024.
The GST rates on small passenger vehicles, three-wheeled vehicles, motorbikes not exceeding 350 cc, commercial vehicles, parts of automobiles and two-wheelers have been rationalized from 28% to 18%. This reduction has led to lower vehicle prices and increased domestic sales, likely increasing competition and enabling manufacturers to achieve greater economies of scale in local production, making Indian manufacturing globally competitive. The Original Equipment Manufacturers (OEMs) have extended the benefits of reduced GST to customers. Minister of Heavy Industries at the time of publishing the statement was Sh. H.D. Kumaraswamy.
Key Entities Referenced
Goods and Services Tax (GST): Referenced through 'GST rate reduction', this tax is central to the policy's impact on the automobile and transportation equipment sector.
Ministry of Heavy Industries: The primary ministry responsible for answering questions regarding the impact of GST reduction on the automobile and transportation sector.
Make in India: A government initiative referenced in the policy, potentially boosted by the reduction in GST rates.
Lok Sabha: The house of the Indian Parliament to which the question regarding GST reduction's impact was addressed.
GOVERNMENT OF INDIA
MINISTRY OF HEAVY INDUSTRIES
LOK SABHA
STARRED QUESTION NO. 131
ANSWERED ON 09.12.2025
IMPACT OF GST REDUCTION ON AUTOMOBILE AND TRANSPORTATION
EQUIPMENT SECTOR
*131. SHRI RAMVIR SINGH BIDHURI:
Will the Minister of HEAVY INDUSTRIES be pleased to state:
(a) the percentage of growth in sales recorded after the reduction in GST rates, particularly in the
automobile and transportation equipment sectors;
(b) whether the reduction in GST rates also boosted 'Make in India' initiative; and
(c) whether the reduction and simplification of GST rates increased competition among domestic
manufacturers, thereby passing the benefits on to consumers?
ANSWER
THE MINISTER OF HEAVY INDUSTRIES
(SH. H.D. KUMARASWAMY)
(a) to (c): A Statement is laid on the Table of the House.STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF LOK SABHA STARRED
QUESTION NO. 131 FOR 09.12.2025 ASKED BY SHRI RAMVIR SINGH BIDHURI REGARDING
“IMPACT OF GST REDUCTION ON AUTOMOBILE AND TRANSPORTATION EQUIPMENT
SECTOR”
(a): As per data at Vahan portal, there has been a 41.3% increase in the total number of vehicles sold in
October 2025 vis-à-vis corresponding month of the previous year. The total number of vehicles sold in
October 2025 were 40,55,559 nos. as compared to 28,70,120 nos. of vehicles sold in October 2024.
(b) & (c): The GST rates on small passenger vehicles, three wheeled vehicles, motorbikes not
exceeding 350 cc, and commercial vehicles (motor vehicles for the transport of goods), parts of
automobiles and two-wheelers have been rationalized from 28% to 18%. This reduction in GST
rates has brought down the prices of vehicles, leading to higher domestic sales, which is likely to
increase competition in the sector. This higher sales volume should enable manufacturers to achieve
greater economies of scale in local production, making Indian manufacturing globally competitive.
The OEMs have extended the benefits of reduced GST to customers.
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