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GST 2.0 Boosts Auto Demand, Maruti Suzuki Accelerates Capex Plans
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News18•22-09-2026, 13:45
GST 2.0 Boosts Auto Demand, Maruti Suzuki Accelerates Capex Plans
- •Maruti Suzuki India is accelerating its capital expenditure plans due to a sharp increase in passenger vehicle demand following GST 2.0 rationalization.
- •The company's passenger vehicle sales grew 36% year-on-year from April-August 2026, with the entry segment surging over 96%.
- •GST 2.0, effective September 22, 2025, lowered tax rates on certain petrol, LPG, CNG, and diesel vehicles, improving affordability.
- •Mahindra & Mahindra also reported growth, with SUVs up 17% and LCVs/tractors up 20%, and plans to add EV capacity.
- •FADA reported that Indian auto retail registered over 3 crore vehicles from October 2025 to August 2026, growing nearly 20% year-on-year, quadrupling the industry's growth pace.
Key Questions Answered
Following the GST 2.0 rationalization, Maruti Suzuki's passenger vehicle sales grew by about 36 per cent year-on-year during the April–August 2026 period, with entry-segment sales surging over 96 per cent due to improved affordability.
Effective September 22, 2025, the GST Council reduced the tax rate from 28 per cent to 18 per cent for petrol, LPG, and CNG vehicles under 1,200 cc and 4,000 mm in length, as well as diesel vehicles up to 1,500 cc and 4,000 mm in length.
Maruti Suzuki has planned a cumulative capex outlay of Rs 77,500 crore from FY26-27 to FY30-31 for capacity expansion, new model development, R&D activities, and other operational measures.
