3 days ago
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Auto Stocks Rally on GST Boost: Shares of leading automobile companies jumped on September 4, with stocks like Mahindra & Mahindra, Tata Motors, Maruti Suzuki, Hero MotoCorp, Bajaj Auto, TVS Motor, and Eicher Motors rallying between 1 per cent and 6 per cent in early trading. The gains followed the government’s announcement of sweeping reductions in the GST rates on a wide range of vehicles.
The Nifty Auto index surged over 2 per cent, making it the best-performing sector of the day, as 14 of its 15 constituents traded in positive territory.
Under the revised tax structure, smaller cars—those under four meters with petrol engines up to 1,200cc or diesel engines up to 1,500cc—will now attract an 18% GST, down from the previous 28 per cent to 31 per cent. Larger SUVs over four meters will face a tax rate of 40 per cent, reduced from the earlier 43 per cent to 50 per cent. Electric vehicles continue to benefit from the concessional 5 per cent GST rate.
Two-wheelers with engine capacities below 350cc will now be taxed at 18 per cent, a drop from 28 per cent. Bikes above 350cc will carry a 40 per cent GST. Also, commercial vehicles including trucks, buses, and ambulances will see their GST reduced to 18% from 28 per cent. Tractors and agricultural machinery will enjoy a steep cut to 5 per cent from 12 per cent, a move expected to make these essential tools more affordable for farmers and boost rural demand.
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