Mon Aug 18 05:50:00 UTC 2025: **Summary:**

In his 79th Independence Day address, Prime Minister Narendra Modi announced plans to reform the Goods and Services Tax (GST) system, expected before Diwali in October. The reforms aim to simplify the tax structure, potentially reducing GST rates for small cars and bikes from 28% to 18%. Mid-segment cars may see a similar reduction, benefiting consumers and potentially boosting sales in the auto sector. Several car models from Maruti, Tata, Hyundai, Renault, and others, along with popular bikes from Hero, Bajaj, TVS, Yamaha, Suzuki, and Honda, could see price reductions.

**News Article:**

**Diwali Gift for Consumers? PM Modi Announces GST Reforms Targeting Lower Vehicle Prices**

**New Delhi:** In a move likely to bring cheer to consumers, Prime Minister Narendra Modi announced sweeping GST reforms during his 79th Independence Day address, promising a simplified tax structure and potentially lower prices for small cars and motorcycles. The reforms are slated to be implemented before Diwali this October.

The proposed changes aim to streamline the GST system, with a particular focus on reducing the tax burden on entry-level vehicles. Currently, small cars face a hefty 28% GST along with an additional 1-3% cess. The proposed reforms could bring these vehicles into the 18% GST slab, resulting in significant savings for buyers. Mid-segment cars could also see a reduction in the overall tax rate.

“This GST reform will be a Diwali gift for the common man,” stated PM Modi during his address.

Analysts predict that the revised GST rates could impact a wide range of vehicles. Popular models from Maruti Suzuki, including the Alto K10, WagonR, Swift, and Baleno, are expected to become more affordable. Tata Motors’ Tiago, Tigor, and Punch could also benefit. Hyundai’s i10, i20, Exter, and even the popular Creta may also see price cuts. Other manufacturers like Renault and Skoda could also reduce prices on models like the Kwid and Kiger.

The two-wheeler market is also expected to see significant changes. Bikes with engines up to 350cc, currently taxed at 28%, could see their GST rate reduced to 18%. This would benefit a large segment of buyers, potentially leading to increased sales for popular models from Hero, Bajaj, TVS, Yamaha, Suzuki, and Honda.

The move is seen as a strategic effort to boost the automotive sector and provide much-needed relief to consumers facing rising costs. Industry experts believe that lower prices could stimulate demand and contribute to economic growth. Further details on the specifics of the GST reforms are expected to be released by the government in the coming weeks.

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