Automobile companies have urged the Centre to implement the revised GST rates before Navratri on September 22, amid concerns that any delay could negatively affect festive season sales, according to people familiar with the matter.
Industry sources said the sector is also pushing for the resolution of procedural challenges, particularly those linked to input tax credit. The uncertainty over GST cuts has already started to weigh on sales momentum, with customers preferring to delay purchases in anticipation of lower rates.
Channel checks conducted last week indicated that while customer enquiries remained healthy, new bookings witnessed a sharp decline as buyers adopt a wait and watch approach. The Federation of Automobile Dealers Associations has also echoed these concerns, cautioning that GST-related uncertainty is already disrupting near-term demand.
The Group of Ministers has approved a proposal from the Centre to restructure the GST slabs by eliminating the current 12 per cent and 28 per cent categories. The new framework would introduce 5 per cent and 18 per cent brackets, with a separate 40 per cent slab reserved for luxury and sin goods. The proposal is now awaiting approval from the GST Council, which is expected to take a final decision in its meeting scheduled for September 3 and 4.
Officials are also considering a reduction in GST on small cars and two-wheelers from 28 per cent to 18 per cent. Larger vehicles, including SUVs, may be moved into the higher 40 per cent category. The Centre is aiming to notify the changes before the festive season begins to provide relief to buyers and boost demand.
With the festive period being crucial for automobile sales, companies believe that a timely rollout of the new GST rates could help support demand and prevent further slowdown. The final call on the timing of implementation will rest with the GST Council.
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