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.
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Hero MotoCorp: Surged over 8%, top gainer on the Nifty
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Maruti Suzuki, M&M, Bajaj Auto, Tata Motors: Rose up to 8% intraday
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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
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Flat 18% GST on mass-market vehicles
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Covered Categories:
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Two-wheelers below 350cc
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Small cars up to 1,200cc
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Certain hybrid vehicles
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Current Tax Rate: 28–31% (depending on engine size and specifications)
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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.
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