Auto Industry Seeks Faster GST Implementation as Sales Take a Hit
CICU Calls for Urgent Action Immediately to Save Industry
City Air News
Aug 26, 2025 05:46
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Ludhiana, August 26, 2025: The Chamber of Industrial & Commercial Undertakings (CICU) in Its Letter to Prime Minister Narinder Modi, expresses deep concern over the ongoing slowdown in the automobile sector, driven by buyers deferring purchases in anticipation of the newly announced GST rate cuts. CICU urges the Government of India and the GST Council to implement the revised GST rates on automobiles and two-wheelers without delay—preferably before the start of the festive season in mid-September and well ahead of Diwali.
The Centre has proposed next generation GST reforms moving from four slabs to a simplified two rate structure. Under the proposal, small cars and two wheelers (engine size below 350cc) would attract 18% GST instead of the current 28%, potentially reducing on road prices by ~8–10%. Meanwhile, luxury cars and SUVs would face a higher composite levy around ~40%. Industry bodies report sharp week on week declines in enquiries and retail sales as customers postpone purchases while awaiting clarity.
CICU President Upkar Singh Ahuja, said, “The auto sector supports millions of livelihoods across dealerships, MSME component makers, and logistics, finance, and after sales services. Since the GST rate cut discussion began, enquiries and retail have slipped into double digit negatives in several segments. Any further delay risks turning the festive quarter into a sales whitewash and hurting MSME cash flows. CICU strongly urges the GST Council to notify and implement the revised rates immediately so that confidence returns and pent up demand can translate into real orders before Diwali. A timely roll out will cushion working capital stress for small suppliers, stabilize production schedules, and protect jobs across the value chain.”
