HSN Chapter 87: Vehicles & Transportation GST Rates 2025
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🚀 Use Complete HSN Rate Finder🚗 Historic Vehicle Price Revolution - GST 2.0 SEPTEMBER 22, 2025
Biggest Auto Industry Transformation Since GST Launch:
GST 2.0 has revolutionized vehicle pricing in India! Small cars and two-wheelers now dramatically cheaper with GST reduced from 28% to just 18%. However, luxury vehicles face higher taxes at 40% GST to promote sustainable mobility.
Key Changes in Chapter 87:
- 🚗 Small Cars: Petrol (≤1200cc), Diesel (≤1500cc), Length ≤4000mm: 28% → 18%
- 🏍️ Two-wheelers ≤350cc: Motorcycles, scooters: 28% → 18%
- 🔋 Electric Vehicles: Continue at attractive 5% GST
- 🏎️ Luxury Vehicles: Large cars, premium bikes: 28% → 40%
- 🔧 Auto Parts: Uniform 18% GST on all automotive components
HSN Chapter 87 represents the backbone of India's transportation sector, covering all types of vehicles from bicycles to luxury cars, commercial vehicles, and their parts. This chapter has undergone the most dramatic transformation under GST 2.0, with pricing changes that will reshape India's automotive landscape.
The September 22, 2025 GST 2.0 reforms mark a historic shift in automotive taxation, eliminating the complex cess system and moving to a clean, simplified structure. Small cars and two-wheelers become significantly more affordable, supporting mass mobility, while luxury vehicles face higher taxes to promote responsible consumption and fund green initiatives.
🚗 GST 2.0 Vehicle Rate Structure - Revolutionary Changes
New GST 2.0 Rate Categories for Vehicles:
- 🟢 5% GST: Electric vehicles, fuel-cell vehicles (green mobility promotion)
- 🔵 18% GST: Small cars, two-wheelers ≤350cc, commercial vehicles, auto parts
- 🔴 40% GST: Luxury cars, premium motorcycles >350cc (luxury taxation)
🎯 MASSIVE VEHICLE PRICE CHANGES - Winners & Impact Areas
BIG WINNERS (Price Cuts):
- 🚗 Small Cars: Save ₹50,000-₹1,50,000 per vehicle
- 🛵 Scooters & Small Bikes: Save ₹8,000-₹15,000 per vehicle
- 🔋 Electric Vehicles: Continue benefiting from 5% GST
HIGHER COSTS (Luxury Tax):
- 🏎️ Large/Luxury Cars: Price increase of ₹1-3 lakhs
- 🏍️ Premium Motorcycles >350cc: Price increase of ₹20,000-₹50,000
🚗 Passenger Cars (HSN 8703) - Major Beneficiaries & Impact Areas
Small Car Revolution - Mass Mobility Boost
Small cars are the biggest winners under GST 2.0! Significant GST reductions from 28% to 18% make basic mobility more accessible to middle-class India, supporting the dream of car ownership.
HSN 8703 - Motor Cars & Passenger Vehicles
| HSN Code | Vehicle Category | GST 2.0 Rate | Previous Rate | Price Impact |
|---|---|---|---|---|
| 8703 21 | Petrol cars ≤1000cc | 18% | 28% | SAVE ₹40,000-80,000 |
| 8703 22 | Petrol cars 1000-1500cc | 18% | 28% | SAVE ₹60,000-1,20,000 |
| 8703 23 | Petrol cars 1500-3000cc | 40% | 28% | COST ₹1,50,000-3,00,000 MORE |
| 8703 24 | Petrol cars >3000cc | 40% | 28% | LUXURY TAX IMPACT |
| 8703 31 | Diesel cars ≤1500cc | 18% | 28% | SAVE ₹50,000-1,00,000 |
| 8703 32 | Diesel cars 1500-2500cc | 40% | 28% | COST ₹1,00,000-2,50,000 MORE |
| 8703 33 | Diesel cars >2500cc | 40% | 28% | PREMIUM SEGMENT IMPACT |
| 8703 40 | Hybrid cars (small) | 18% | 28% | ECO-FRIENDLY SAVINGS |
| 8703 50 | Hybrid cars (large) | 40% | 28% | LUXURY HYBRID IMPACT |
| 8703 80 | Electric cars (all sizes) | 5% | 5% | CONTINUE BENEFITS |
| 8703 90 | Other motor vehicles | 18% | 28% | SPECIALTY VEHICLE SAVINGS |
🏍️ Two-wheelers (HSN 8711) - Youth Mobility Revolution
Two-Wheeler Affordability Boost
Two-wheelers up to 350cc are now significantly more affordable! GST reduction from 28% to 18% makes motorcycles and scooters accessible to young India, boosting employment and mobility opportunities.
HSN 8711 - Motorcycles & Two-wheelers
| HSN Code | Vehicle Type | GST 2.0 Rate | Previous Rate | Savings/Impact |
|---|---|---|---|---|
| 8711 10 | Motorcycles ≤50cc | 18% | 28% | SAVE ₹3,000-5,000 |
| 8711 20 | Motorcycles 50-250cc | 18% | 28% | SAVE ₹8,000-15,000 |
| 8711 30 | Motorcycles 250-350cc | 18% | 28% | SAVE ₹12,000-20,000 |
| 8711 40 | Motorcycles 350-500cc | 40% | 28% | COST ₹15,000-30,000 MORE |
| 8711 50 | Motorcycles 500-800cc | 40% | 28% | COST ₹25,000-50,000 MORE |
| 8711 60 | Motorcycles >800cc | 40% | 28% | LUXURY BIKE IMPACT |
| 8711 70 | Electric motorcycles/scooters | 5% | 5% | CONTINUE EV BENEFITS |
| 8711 90 | Other two-wheelers | 18% | 28% | SPECIALTY VEHICLE SAVINGS |
🔋 Electric Vehicles (EV) - Green Mobility Leadership
Electric Vehicle Continued Incentives
Electric vehicles continue to enjoy the preferential 5% GST rate under GST 2.0, maintaining India's commitment to sustainable mobility and supporting the transition to clean transportation.
Electric Vehicle Categories & Benefits
| EV Category | HSN Code | GST Rate | Additional Benefits |
|---|---|---|---|
| Electric Cars (all sizes) | 8703 80 | 5% | Massive savings vs conventional cars |
| Electric Two-wheelers | 8711 70 | 5% | FAME subsidies + state incentives |
| Electric Three-wheelers | 8703 10 | 5% | Commercial EV incentives |
| Electric Buses | 8702 40 | 5% | Public transport promotion |
| Fuel Cell Vehicles | 8703 90 | 5% | Future technology support |
🚛 Commercial Vehicles (HSN 8701-8702, 8704-8705)
Commercial Vehicle Stability
Commercial vehicles maintain stable GST rates under GST 2.0, providing predictability for logistics and transportation businesses that form the backbone of India's economy.
HSN 8701 - Tractors & Road Tractors
| HSN Code | Vehicle Type | GST 2.0 Rate | Previous Rate | Application |
|---|---|---|---|---|
| 8701 10 | Single-axle tractors | 18% | 18% | Small farming operations |
| 8701 20 | Road tractors for trailers | 18% | 18% | Heavy goods transport |
| 8701 30 | Track-laying tractors | 18% | 18% | Construction, mining |
| 8701 90 | Other tractors | 18% | 18% | Specialized applications |
HSN 8702 - Public Transport Vehicles
| HSN Code | Vehicle Type | GST 2.0 Rate | Previous Rate | Passenger Capacity |
|---|---|---|---|---|
| 8702 10 | Buses with compression-ignition engines | 18% | 18% | 10+ persons |
| 8702 20 | Buses with spark-ignition engines | 18% | 18% | 10+ persons |
| 8702 30 | Buses with electric motors | 5% | 5% | Electric public transport |
| 8702 90 | Other buses and coaches | 18% | 18% | Specialty transport |
HSN 8704 - Goods Transport Vehicles
| HSN Code | Vehicle Type | GST 2.0 Rate | Previous Rate | Load Capacity |
|---|---|---|---|---|
| 8704 10 | Dumper trucks | 18% | 18% | Construction/mining use |
| 8704 21 | Light commercial vehicles ≤5 tonnes | 18% | 18% | Small goods transport |
| 8704 22 | Medium commercial vehicles 5-20 tonnes | 18% | 18% | Regional transport |
| 8704 23 | Heavy commercial vehicles >20 tonnes | 18% | 18% | Long-haul transport |
| 8704 31 | Electric goods vehicles ≤5 tonnes | 5% | 5% | Electric last-mile delivery |
| 8704 32 | Electric goods vehicles >5 tonnes | 5% | 5% | Electric freight transport |
🔧 Automotive Parts & Accessories (HSN 8708)
Uniform Auto Parts Taxation
GST 2.0 brings uniformity to automotive parts taxation with a consistent 18% rate across all components, simplifying supply chain management and reducing compliance complexity for the automotive industry.
HSN 8708 - Vehicle Parts & Accessories
| HSN Code | Component Type | GST 2.0 Rate | Previous Rate | Vehicle Application |
|---|---|---|---|---|
| 8708 10 | Bumpers and parts thereof | 18% | 18% | All vehicles |
| 8708 21 | Safety seat belts | 18% | 18% | Passenger vehicles |
| 8708 29 | Other body parts | 18% | 18% | Body panels, doors |
| 8708 30 | Brakes and servo-brakes | 18% | 18% | Safety systems |
| 8708 40 | Gear boxes | 18% | 18% | Transmission systems |
| 8708 50 | Drive-axles with differential | 18% | 18% | Power transmission |
| 8708 70 | Road wheels and parts | 18% | 18% | Wheels and rims |
| 8708 80 | Suspension systems | 18% | 18% | Shock absorbers, springs |
| 8708 91 | Radiators and parts | 18% | 18% | Cooling systems |
| 8708 92 | Silencers and exhaust pipes | 18% | 18% | Exhaust systems |
| 8708 93 | Clutches and parts | 18% | 18% | Manual transmission |
| 8708 94 | Steering wheels and columns | 18% | 18% | Steering systems |
| 8708 95 | Safety airbags | 18% | 18% | Passive safety systems |
| 8708 99 | Other vehicle parts | 18% | 18% | Miscellaneous components |
🧮 Vehicle GST Calculator - Before vs After Comparison
Vehicle Price Impact Calculator - GST 2.0
Calculate the exact price impact of GST 2.0 on your vehicle purchase:
CGST = (Ex-showroom Price × GST Rate) ÷ 200
SGST = (Ex-showroom Price × GST Rate) ÷ 200
Total GST = CGST + SGST
On-road Price = Ex-showroom + GST + Registration + Insurance + Others
Major Changes: Small cars 28% → 18%, Luxury cars 28% → 40%
💰 Real Vehicle Savings Examples
🎯 Popular Vehicle Price Impact (Real Examples):
| Vehicle Model | Ex-showroom (₹) | Old Total (28%) | New Total (GST 2.0) | Your Impact |
|---|---|---|---|---|
| Maruti Alto (Small Car) | ₹4,00,000 | ₹5,12,000 | ₹4,72,000 | SAVE ₹40,000 |
| Honda City (Mid-size) | ₹12,00,000 | ₹15,36,000 | ₹16,80,000 | COST ₹1,44,000 MORE |
| Honda Activa (Scooter) | ₹75,000 | ₹96,000 | ₹88,500 | SAVE ₹7,500 |
| Royal Enfield 350cc | ₹2,00,000 | ₹2,56,000 | ₹2,36,000 | SAVE ₹20,000 |
| KTM Duke 390cc | ₹3,00,000 | ₹3,84,000 | ₹4,20,000 | COST ₹36,000 MORE |
| Tata Nexon EV | ₹15,00,000 | ₹15,75,000 | ₹15,75,000 | SAME (Continue 5%) |
📋 GST 2.0 Compliance for Automotive Sector
🚗 Car Dealers & Manufacturers
- Small cars: Major savings for customers
- Luxury cars: Higher prices, premium positioning
- Update pricing systems immediately
- New inventory valuation required
- Customer communication about changes
🏍️ Two-wheeler Industry
- Bikes ≤350cc: Massive demand boost expected
- Premium bikes: Price increase impact
- Youth market expansion opportunities
- Inventory adjustment strategies
- Electric 2W continue incentives
🔋 Electric Vehicle Sector
- Continue enjoying 5% GST advantage
- Market share expansion opportunity
- FAME scheme additional benefits
- State government incentives
- Green mobility leadership
🔧 Auto Parts Industry
- Uniform 18% GST simplifies pricing
- Reduced compliance complexity
- Aftermarket parts consistency
- Supply chain optimization
- OEM-aftermarket price parity
🎯 GST 2.0 Industry Impact Analysis
Mass Mobility Winners
- 🚗 Entry-level Cars: ₹40,000-80,000 savings boost sales
- 🛵 Scooters & Small Bikes: Youth mobility revolution
- 🔋 Electric Vehicles: Continue competitive advantage
- 🚌 Public Transport: Electric buses get 5% benefit
- 📈 Economic Growth: Increased mobility drives employment
Luxury Vehicle Market Reshaping
- 🏎️ Premium Cars: ₹1-3 lakh price increase
- 🏍️ High-end Motorcycles: ₹20,000-50,000 impact
- 💎 Market Positioning: True luxury differentiation
- 🌱 Green Revenue: Luxury tax funds sustainability
- 📊 Market Consolidation: Focus on value propositions
Automotive Industry Strategic Implications
- 📊 Demand Shift: Volume growth in small cars/bikes
- 🏭 Manufacturing Focus: Small car production ramp-up
- 💼 Pricing Strategy: Luxury brands reassess positioning
- 📈 Market Expansion: Rural and semi-urban penetration
- ⚡ EV Acceleration: Electric adoption speeds up
❓ Vehicle GST 2.0 FAQ
Q1: When did the new vehicle GST rates become effective?
Answer: The new GST rates became effective from September 22, 2025. All vehicle purchases on or after this date benefit from the revised rates.
Q2: Which vehicles got cheaper under GST 2.0?
Answer: Small cars (petrol ≤1200cc, diesel ≤1500cc, length ≤4000mm) and two-wheelers up to 350cc saw GST reduce from 28% to 18%, resulting in significant price cuts.
Q3: Why did luxury vehicle prices increase?
Answer: Luxury vehicles now attract 40% GST (up from 28%) as part of a policy to discourage high-emission, resource-intensive vehicles while funding green initiatives.
Q4: Do electric vehicles benefit from GST 2.0?
Answer: Yes, electric vehicles continue to enjoy the preferential 5% GST rate, making them even more competitive compared to conventional vehicles that now face higher taxes.
Q5: How does the new GST affect on-road prices?
Answer: Since road tax and insurance are calculated as percentages of ex-showroom price, any change in GST also proportionally affects these components, amplifying the total impact.
Q6: Are there any exemptions for differently-abled persons?
Answer: Yes, vehicles specifically designed and manufactured for use by physically disabled persons continue to be exempt from GST under special provisions.
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