M&M, Eicher Motors, Tata Motors & other auto stocks surge up to 6% on GST tax relief

“Around 64 percent of demand in the passenger vehicle segment comes from small cars, with Maruti Suzuki set to be the largest beneficiary. On the two-wheeler side, motorcycles under 350cc will gain from the tax relief, making Hero MotoCorp a top pick. Commercial vehicles are also expected to see a momentum pickup in the second half of this fiscal, supported by healthy GDP growth and lower taxes,” he said.

Under the revised GST structure, small cars—vehicles under four meters in length with petrol engines up to 1,200cc or diesel engines up to 1,500cc—will now attract an 18 percent GST, down from 28–31 percent previously. Large SUVs over four meters will face a 40 percent tax, reduced from 43–50 percent earlier. Electric vehicles remain under the concessional 5 percent GST.

Two-wheelers under 350cc will be taxed at 18 percent versus 28 percent earlier, while motorcycles above 350cc are taxed at 40 percent.

Commercial vehicles, including trucks, buses, and ambulances, will now attract 18 percent GST, down from 28 percent. Tractors and agricultural machinery will see a steep reduction to 5 percent from 12 percent, lowering acquisition costs for farmers and boosting affordability in rural markets.

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