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Updated On: 04-Sep-2025 06:22 AM
GST cut on three-wheelers, small cars, motorcycles, and goods vehicles brings festive relief. Lower costs boost small businesses, drivers, and traders, making mobility affordable this Diwali 2025.
GST on 3-wheelers cut from 28% to 18%.
Small cars and bikes under 350cc are also cheaper.
Goods transport vehicles see tax relief.
PM Modi calls it a Diwali gift.
Boost for MSMEs and last-mile delivery.
The Union Government has announced a major festive relief under the Next-Gen GST Reform 2025, reducing the Goods and Services Tax (GST) on three-wheelers, small cars, motorcycles, and goods transport vehicles. This decision, announced just before Diwali, will make essential vehicles more affordable and support drivers, small traders, and fleet operators across India.
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One of the biggest announcements is the reduction of GST on passenger and cargo three-wheelers from 28% to 18%. This move is expected to cut down ownership costs for auto-rickshaw drivers, small businesses, and logistics operators who rely heavily on these vehicles.
Item | Old GST Rate | New GST Rate |
3-Wheeled Vehicles | 28% | 18% |
Petrol & Petrol Hybrid, LPG, CNG Cars (≤1200cc & ≤4000mm) | 28% | 18% |
Diesel & Diesel Hybrid Cars (≤1500cc & ≤4000mm) | 28% | 18% |
Motorcycles (≤350 cc) | 28% | 18% |
Goods Transport Vehicles | 28% | 18% |
Calling the reform a Diwali gift, Prime Minister Narendra Modi said, “The next generation of GST reforms is a gift for every Indian this Diwali. Taxes for the general public will be reduced substantially. Our MSMEs & small entrepreneurs will get huge benefits. Everyday items will become cheaper, and this will also give a new boost to the economy.”
Affordable Investment: The lower GST will reduce the upfront cost of three-wheelers, helping small businesses expand fleets more easily.
Higher Profit Margins: Reduced purchase costs will allow drivers and operators to recover investments faster.
Boost for Last-Mile Delivery: Traders and logistics providers using autos for daily transport will save significantly.
Festive Momentum: Combined with Diwali discounts, the GST cut is expected to push vehicle demand.
The GST Reform 2025 is more than just a tax cut; it is a step towards strengthening India’s transport backbone. By making three-wheelers, small cars, motorcycles, and goods carriers more affordable, the government is boosting mobility, self-employment, and small business growth. With festive season demand already high, this reform is set to bring both economic growth and happiness to millions of Indian households.
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The GST Reform 2025 is a strong festive move that directly supports drivers, small traders, and fleet operators. By reducing tax on three-wheelers, small cars, motorcycles, and goods vehicles, the government has boosted affordability, encouraged self-employment, and strengthened last-mile connectivity. This reform, paired with Diwali discounts, will accelerate demand and contribute to India’s economic growth.