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India’s revenue secretary, Tarun Bajaj, said, the government is open to discussion on changes to GST on automobiles. Revision of taxes rates on vehicles is a long-standing request from automakers.


In the conference organized by the Society of Indian Automobile Manufacturers (SIAM), Bajaj said, he wanted to better understand the reason for a slump in vehicle sales over the last few years and whether it was solely due to high taxes. Revival of the auto industry is crucial to meet the country’s growth targets, he added.


Currently, the Goods and Services Tax (GST) on automobiles, including cars, trucks and motorbikes is 28pc along with other additional state taxes, which acts as a deterrent for many potential buyers. Additionally, high raw material prices and upgrades to meet stricter safety and emission rules have increased input costs.


People are finding it increasingly difficult to afford cars due to a surge in prices, said the chairman of Maruti Suzuki, R.C Bhargava.


Indian auto sales have trended down over the last couple of years, initially due to an economic slowdown in 2019, followed by the COVID-19 pandemic. Recently, the ongoing shortage of semiconductors has also caused disruptions in sales.

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