Hero MotoCorp, Maruti Suzuki, M&M Rally Up to 8% on GST Cut Buzz

Market Performance

Auto stocks witnessed strong buying interest on Monday, August 18, 2025, after reports of a possible reduction in GST on mass-market vehicles.

• Hero MotoCorp: Surged over 8%, top gainer on the Nifty

• Maruti Suzuki, M&M, Bajaj Auto, Tata Motors: Rose up to 8% intraday

• Sector Sentiment: The rally lifted the broader auto index, reflecting optimism across the sector

Positive Development: GST Cut Proposal

According to reports, the government is considering a two-tier GST structure to simplify taxation and reduce costs for middle-income households. The proposal is expected to be finalised around Diwali 2025.

Key Points of Proposal

• Flat 18% GST on mass-market vehicles

• Covered Categories:

  • Two-wheelers below 350cc

  • Small cars up to 1,200cc

  • Certain hybrid vehicles

• Current Tax Rate: 28–31% (depending on engine size and specifications)

• Luxury Cars & SUVs: To continue under the 40% slab

Industry Impact

The proposed cut could significantly reduce prices for entry-level two-wheelers, compact cars, and hybrids. This is expected to boost demand in the mass-market segment, a key driver of India’s auto industry.

Summary

Hero MotoCorp, Maruti Suzuki, and M&M shares rallied up to 8% on August 18, 2025, after reports of a possible GST cut on small cars, two-wheelers, and hybrids. The move, aimed at easing household costs and streamlining the tax regime, is expected to support demand across the auto sector.