GST Cut: What It Means for India’s Commercial Vehicle Industry

By Amit Jangra | Published Date : September 26, 2025

The GST on commercial vehicles has been reduced from 28% to 18%, making trucks, pickups and EVs more affordable for transporters and small businesses.

The transport sector in India got a big relief on 22 September 2025, when the government reduced GST on commercial vehicles from 28% to 18%. For truck operators, small transporters and logistics companies, this is a welcome change. With lower GST, the price of trucks, pickups and mini trucks has gone down and owning these vehicles has become easier. Even electric vehicles will benefit because their parts and services now cost less.

This move could be the nudge businesses needed. Lower costs make it a lot easier to invest in new vehicles, upgrade fleets, or retire those aging trucks that are costing more to maintain.

What Changed in GST?

Table of Contents

1. What Changed in GST?

2. Impact on Vehicle Segments

3. Electric Commercial Vehicles

4. Benefits of the Reduction

5. Challenges in Transition

6. Industry Outlook

7. Final Words

Read More: Euler EV 1000 Series Electric Pickups for Business

Earlier, buying a truck or mini truck meant paying 28% GST. Now it has been brought down to 18%. Spare parts and maintenance services are also included in this lower rate. This means the cost of both purchase and upkeep has reduced, directly benefiting transporters.

Impact on Vehicle Segments

Heavy Trucks

Long-distance transport relies heavily on big trucks. With the new GST rate, operators can save lakhs on every purchase.

For example, a truck worth ₹25,00,000 earlier carried a tax of ₹7,00,000 at 28%. Now, with 18%, the tax comes down to ₹4,50,000. That’s a saving of ₹2,50,000. Such savings help fleet owners invest in additional vehicles or switch to modern fuel-efficient models.

Mini Trucks

A mini truck worth ₹8 lakh earlier came with ₹2.24 lakh in GST. Now, that drops to ₹1.44 lakh — that’s ₹80,000 saved right there. For small business owners, that kind of relief can be a game changer when looking to add even one more vehicle.

Pickups

Pickups bridge the gap between rural and urban transport. Earlier, a ₹10 lakh pickup had a tax burden of ₹2.8 lakh. Now, it's down to ₹1.8 lakh — that’s ₹1 lakh saved right off the bat.

Electric Commercial Vehicles

EVs already had a 5% GST on the vehicle itself, but now parts and services also get tax relief. That means maintenance costs come down, making EVs not just cleaner — but smarter business choices too.

Benefits of the Reduction

→ Vehicles become cheaper to buy
→ Maintenance and service costs go down
→ Fleet expansion becomes affordable
→ Old vehicles can be replaced more quickly
→ Small businesses find it easier to invest
→ Electric mobility gets an extra push

Challenges in Transition

There may be some short-term issues. Dealers holding older stock bought at 28% GST will need to adjust prices. Businesses will also take a little time to adapt to the new system. And since demand is expected to rise sharply, there could be temporary supply shortages.

Industry Outlook

Industry insiders are optimistic. The cut is expected to boost sales across segments, especially in the heavy and mini truck categories.

Companies that were holding off on upgrades due to cost can now move forward. And startups or smaller fleet operators will find it much easier to enter the market.

Long-term, even electric commercial vehicles will benefit, supporting India’s shift to greener logistics.

Final Words

The GST cut is more than just another policy change. It’s a big step that could actually help businesses cut costs, shift to cleaner transport and make room for both seasoned players and smaller operators to thrive.

No matter if someone runs just one truck or an entire fleet, this move makes it simpler to expand, replace old vehicles, or just stay in the game without breaking the bank.

Also Read: 5 Tips to Improve the Mileage of Your Truck And Mini Truck

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Frequently Asked Questions on Commercial Vehicles

1: What is the new GST rate for commercial vehicles in India?

Ans: The GST rate has been reduced from 28% to 18% for commercial vehicles, spare parts and related services.

2: How much can businesses save due to this GST cut?

Ans: For a ₹25 lakh truck, the GST savings are around ₹2.5 lakh. For pickups and mini trucks, savings range from ₹80,000 to ₹1 lakh

3: Do electric commercial vehicles benefit from this GST cut?

Ans: Yes. While EVs already had 5% GST, their parts and maintenance services now also benefit from lower tax rates, reducing overall costs.

4: Who will benefit the most from this GST reduction?

Ans: Small transporters, logistics companies and fleet operators will benefit the most due to reduced vehicle prices and lower upkeep costs.

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