The 56th GST Council introduced a sweeping restructuring of GST rates for the Automobile/Mobility and Electronics/Electricals industries.
This guide blends every notified entry with clear tables, sector analysis, and business tips—designed for quick reading and easy compliance.
🚗 Automobile & Mobility
The changes follow two clear aims:
- Promote entry-level mobility, agriculture and logistics through sharp tax cuts.
- Discourage luxury and premium consumption via a steep 40% rate on high-end vehicles.
A) 12% → 5%
| HSN / Chapter | Description | From | To | ITC |
|---|---|---|---|---|
| 87 | Fuel-cell motor vehicles (including hydrogen vehicles) | 12% | 5% | With ITC |
| 8701 | Tractors (except road tractors >1800 cc) | 12% | 5% | With ITC |
| 8710 | Tanks & armoured fighting vehicles, parts | 12% | 5% | With ITC |
| 8712 | Bicycles & delivery tricycles (non-motorised) | 12% | 5% | With ITC |
| 8714 | Parts for cycles (heading 8712) | 12% | 5% | With ITC |
| 8716 20 00 | Self-loading/unloading agri trailers | 12% | 5% | With ITC |
| 8716 80 | Hand-propelled & animal-drawn vehicles | 12% | 5% | With ITC |
B) 18% → 5% – Agricultural Engines & Tractor Parts
| HSN / Chapter | Description | From | To | ITC |
|---|---|---|---|---|
| 8408 20 20 | Agricultural diesel engine (>250 cc) for tractors | 18% | 5% | With ITC |
| 8413 81 90 | Hydraulic pumps for tractors | 18% | 5% | With ITC |
| 8708 | Tractor parts – rims, housings, axle supports | 18% | 5% | With ITC |
| 8708 10 10 | Bumpers | 18% | 5% | With ITC |
| 8708 30 00 | Brake assemblies | 18% | 5% | With ITC |
| 8708 40 00 | Gear boxes | 18% | 5% | With ITC |
| 8708 50 00 | Transaxles | 18% | 5% | With ITC |
| 8708 70 00 | Road wheels | 18% | 5% | With ITC |
| 8708 91 00 | Radiator/cooling assemblies | 18% | 5% | With ITC |
| 8708 92 00 | Silencers | 18% | 5% | With ITC |
| 8708 93 00 | Clutches | 18% | 5% | With ITC |
| 8708 94 00 | Steering wheels | 18% | 5% | With ITC |
| 8708 99 00 | Hydraulics, fenders, hoods, fuel tanks & panels | 18% | 5% | With ITC |
C) 28% → 18% – Standard Vehicles
| HSN / Chapter | Description | From | To | ITC |
|---|---|---|---|---|
| 8701 | Road tractors for semi-trailers (>1800 cc) | 28% | 18% | With ITC |
| 8702 | Passenger vehicles (≥10 persons) | 28% | 18% | With ITC |
| 8703 | Three-wheelers & ambulances (factory cleared) | 28% | 18% | With ITC |
| 8703 40 / 60 | Hybrid petrol cars ≤1200 cc & ≤4000 mm | 28% | 18% | With ITC |
| 8703 50 / 70 | Hybrid diesel cars ≤1500 cc & ≤4000 mm | 28% | 18% | With ITC |
| 8704 | Goods vehicles | 28% | 18% | With ITC |
| 8706 | Chassis fitted with engines | 28% | 18% | With ITC |
| 8707 | Bodies (incl. cabs) | 28% | 18% | With ITC |
| 8708 | Parts & accessories (general) | 28% | 18% | With ITC |
| 8711 (≤350 cc) | Motorcycles & mopeds ≤350 cc | 28% | 18% | With ITC |
| 8714 (of 8711) | Motorcycle parts | 28% | 18% | With ITC |
D) 28% + Cess → 18% – Small Cars
| HSN | Description | From | To | ITC |
|---|---|---|---|---|
| 8703 | Petrol/CNG/LPG cars ≤1200 cc & ≤4000 mm | 28% + 1% Cess | 18% | With ITC |
| 8703 | Diesel cars ≤1500 cc & ≤4000 mm | 28% + 3% Cess | 18% | With ITC |
E) 28% → 40% – Luxury & Big Bikes
| HSN / Chapter | Description | From | To | ITC |
|---|---|---|---|---|
| 8703 | Luxury cars & high-end vehicles | 28% | 40% | With ITC |
| 870340 / 60 | Large hybrids – petrol >1200 cc / >4000 mm | 28% | 40% | With ITC |
| 870350 / 70 | Large hybrids – diesel >1500 cc / >4000 mm | 28% | 40% | With ITC |
| 8711 (>350 cc) | Motorcycles >350 cc | 28% + 3% Cess | 40% | With ITC |
Impact on Automobiles
- Demand will grow for tractors, entry-level cars, and bikes up to 350 cc.
- Goods vehicles at 18% ease transport costs.
- Premium cars and big motorcycles face costlier GST.
- Tractor manufacturers should track inverted duty positions to claim refunds.
- Businesses need accurate documentation for capacity and dimensions to secure concessional rates.
💡 Electronics & Electricals
The rationalisation aims to lower costs for consumer durables and renewable solutions, supporting both household budgets and clean-energy adoption.
A) Consumer Durables – 28% → 18%
| HSN | Description | From | To | ITC |
|---|---|---|---|---|
| 8415 | Air-conditioning machines | 28% | 18% | With ITC |
| 8422 | Dishwashers | 28% | 18% | With ITC |
| 8528 | Televisions, monitors, projectors, set-top boxes | 28% | 18% | With ITC |
B) Other Electronics & Renewables
| HSN | Description | From | To | ITC |
|---|---|---|---|---|
| 8525 60 | Walkie-talkies for defence, police & paramilitary | 12% | 5% | With ITC |
| 8507 | Electric accumulators (non-Li-ion) | 28% | 18% | With ITC |
| 8419 12 | Solar water heaters & systems | 12% | 5% | With ITC |
Impact on Electronics
- MRPs for ACs, TVs, and dishwashers will likely drop.
- Stock cleared at old rates may need Section 14 price adjustments.
- Walkie-talkies and solar water heaters become more affordable.
- Businesses must separate Li-ion from non-Li batteries to apply the correct rate.
📝 Compliance & Business Tips
- Update ERP systems, catalogues, and dealer price lists without delay.
- Capture product parameters (engine cc, car length, battery type) on invoices.
- Use credit notes to manage inventory sold before the new rates.
- Plan promotional campaigns reflecting the revised GST rates.
- For tractors and agri engines, assess refund eligibility on inverted duty.
✅ Final Thoughts
The 56th GST Council has realigned rates to balance affordability, green tech, and revenue.
Stakeholders should act quickly—price correctly, classify accurately, and make use of every eligible credit to stay competitive.
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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: September 18, 2025