GST Council Reduces Tax Rate on Buses, Trucks and Ambulances from 28% to 18%

By Amit Jangra | Published Date : September 03, 2025

GST Council cuts tax on buses, trucks and ambulances from 28% to 18%, reducing vehicle costs and boosting the transport and healthcare sectors in India.

Officially, the government has finally slashed GST on trucks, buses and ambulances from 28% to 18%. Announced during the 56th GST Council meeting, the move couldn’t have come at a better time for thousands of transporters who’ve been under pressure for years.

Let’s face it: buying a new commercial vehicle in India hasn’t been cheap for a while now. Whether you're running a small logistics business or part of a state-run transport unit, the costs have been biting. Between fuel prices, EMI stress and rising maintenance, a 28% tax felt like a slap in the face.

Now, with the tax down to 18%, there’s finally some breathing room especially for the smaller players who’ve been delaying purchases for months (if not years).

Relief for the Trucking Sector

Table of Contents

1. Relief for the Trucking Sector

2. Boosting the Bus Industry After a Tough Few Years

3. Ambulances Made More Accessible

4. Industry Reaction: Mostly Positive

5. Final Words

Read More: New Stop-Start System by Volvo Aims to Cut Fuel Use in Commercial Trucks

India’s trucking industry plays a crucial role in keeping goods moving — whether it’s food, raw materials, or e-commerce packages. But the high cost of new trucks has long been a sticking point, especially for small transporters who can’t easily absorb the financial hit.

By bringing the GST down to 18%, the government hopes to make new trucks more affordable. The savings could be substantial — estimates suggest vehicle prices may drop by up to 10%. For companies looking to scale their operations, this opens up the possibility of fleet expansion without stretching their budgets.

Boosting the Bus Industry After a Tough Few Years

The pandemic hit the passenger transport sector hard. Many state transport undertakings and private players postponed or canceled plans to buy new buses. Even with travel picking up again, the high cost of new vehicles has kept recovery slow.

Lowering the tax rate could change that. Public bus operators, tour companies and even schools stand to benefit. Affordable buses could lead to improved public transportation, better connectivity in rural areas and perhaps even support domestic tourism.

Ambulances Made More Accessible

Ambulances are often taxed like any other commercial vehicle — a policy that has drawn criticism in the past. Healthcare providers, especially in rural areas, struggle to buy new ambulances because of the cost.

With the GST now at 18%, hospitals and clinics may find it easier to invest in emergency vehicles. It’s a small change on paper but could have a big impact in places where every second counts during a medical emergency.

Industry Reaction: Mostly Positive

The announcement has been well received across the board. Manufacturers say it will encourage production and possibly job creation. Fleet operators see it as a step in the right direction. There’s also hope that this will drive adoption of greener vehicles, including EVs and CNG-powered trucks.

Final Words

This GST cut isn’t just about numbers — it’s about unlocking growth for sectors that are vital to India’s economy. Trucks deliver our goods. Buses connect our towns. Ambulances save lives. Making them more affordable is a move that goes beyond tax policy; it touches everyday lives.

As companies begin to respond to the new rates, the real test will be how much of this benefit is passed on to end users and how quickly.

Related News: 

☞ Ashok Leyland To Put Rs 5,000 crore into EV battery production

☞ 200kW Fuel Cell Concept For Trucks and Buses

---

Frequently Asked Questions on Commercial Vehicles

1. What is the new GST rate for buses, trucks and ambulances in India?

Ans: The GST rate has been reduced from 28% to 18% on buses, trucks and ambulances.

2. Why did the GST Council reduce the tax rate on commercial vehicles?

Ans: The tax cut aims to reduce costs for businesses, boost vehicle sales and support the transport and healthcare sectors during slow economic growth.

3. How will this GST change impact the automotive industry?

Ans: Vehicle prices may drop by up to 10%, encouraging new purchases, fleet upgrades and investment in logistics, tourism and emergency services.

4. Does the new GST rate apply to both private and government purchases?

Ans: Yes, the reduced GST rate applies to all eligible purchases, benefiting private operators, government transport bodies and healthcare providers alike.

---

Join us for the latest updates on the Truck Industry -

☞  Facebook 

☞  Instagram

☞  YouTube

☞  Twitter

☞  LinkedIn

☞  Threads

Join Our WhatsApp Channel