GST 2.0 (launched late 2025) significantly boosts the Indian economy by reducing tax rates on essential goods and simplifying the structure into, largely, a 5% and 18% slab system. This drives consumption-led growth, with an estimated 1 % -- 1.2 % 1 % - - 1 . 2 % increase in GDP, lowers retail inflation by over 1 percentage point, and increases disposable income for the middle class.
GST 2.0 significantly impacts the used car market by lowering prices and enhancing consumer confidence, leading to increased demand and better financing options. Goods and Services Tax (GST) 2.0 represents a significant update to the tax system in India.
In September 2025 the GST Council approved a major rationalisation of GST rates that materially affects the healthcare and pharmaceutical sector: broad reductions in GST on medicines and medical devices (most medicines moved from 12% to 5%; several life-saving drugs became fully exempt), medical devices' rates cut to 5 ...
GST reforms affect production costs, retail pricing, and overall consumption patterns, which in turn impact fund returns. For instance, reduced GST on textiles, footwear, packaged foods, and healthcare products lowers costs for producers and prices for consumers, creating higher sales volumes and profits.
The rollout of GST 2.0 has created a positive impact across Hyundai's portfolio. Compact cars under 1200cc and 4000mm, like the Grand i10 Nios, Aura, Exter, and i20, now enjoy savings up to ₹1.23 lakh. Larger sedans and SUVs such as the Verna, Creta, and Alcazar see reductions of around ₹60,000–₹75,000.
How Will These Tariff Changes Affect Hyundai Pricing? As of mid-2025, Hyundai is evaluating across-the-board price increases for vehicles impacted by tariffs. This includes popular models like the Tucson, Elantra, and Santa Fe, especially if manufactured or sourced overseas.
On a note of the latest GST 2.0 reforms, Kia India announced drastic price cuts across its internal combustion engine (ICE) variants. The Kia price cut will be applicable on several editions, including Kia Seltos, Kia Carens, Kia Carens Clavis, etc.
At a net level though, the impact of the GST cuts is expected to be largely positive. According to ratings agency Crisil, lower taxes will benefit a third of an average consumer's monthly expenditure basket and improve the middle class's purchasing power.
NEGATIVE IMPACT OF GST:
Incumbent increase of the cost of some commodities - The tax rate has been increased for many products, thus increasing their costs. Some sector are at a loss- Sectors like Textile, Media, Pharma, Dairy Products, IT and Telecom are bearing the brunt of a higher tax.
By lowering GST rates on daily food items, construction materials, gyms/fitness centres, and automobiles, the Government has not only reduced the financial burden on households but also advanced its long-term vision of promoting healthier lifestyles, affordable housing and transportation, and improved ease of living ...
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
GST on hotel rooms is reduced from 12% to 5% for tariffs up to ₹7,500 per day, effective 22nd September 2025. No ITC is allowed at 5%, so hotels with both budget and premium rooms must carefully manage their tax credits. Rooms priced above Rs. 7,500 will continue to attract 18% GST, and ITC is fully available here.
Impact of GST on Electronic Goods and Consumer Durables
GST 2.0 indirectly benefits buyers of consumer durable products using loans. With lower GST rates on electronics, the overall cost of products decreases, allowing customers to borrow a smaller amount and pay lower EMIs.
The GST 2.0 has simplified several products in different slabs, whereas in the EV sector, there is no change. Let's have a quick look at the list. This means the electric vehicles continue to enjoy the low GST tax, but batteries, automotive parts, and services can impact the pockets of drivers.
GST 2.0 has proven to be the defining moment for India's auto industry in 2025, turning a sector plagued by sluggish demand into one brimming with optimism. With double-digit growth projections for FY26, the reform has not only lifted immediate sales but also set the foundation for long-term transformation.
What is GST 2.0, and how does it affect Toyota cars? GST 2.0 is a revised tax structure effective from September 22, 2025. For Toyota, it means lower GST rates across its lineup: 18% for sub-4m small cars and 40% for larger cars/SUVs.
GST in India has four components – CGST, SGST, IGST, and UTGST. The charge depends upon whether the transaction is intra-state or inter-state. The Central Government charges CGST, while the State Governments and Union Territories levy SGST and UTGST respectively, on intra-state supplies.
Reduced cost of production
With offsetting, simplification, and subsumption of different taxes under a single tax structure, GST has reduced the production cost of manufacturing goods. This has also reduced the burden of indirect taxes on manufacturers as well as consumers.
Duty Drawback is a trusted and time-tested scheme administered by CBIC to promote exports. It rebates the incidence of Customs and Central Excise duties, chargeable on imported and excisable material respectively when used as inputs for goods to be exported.
Consumer price index (CPI) inflation rose sharply in 2021–2022 due to global supply shocks, reaching 6.1% in 2022. The GST hike in 2023 added a one-off bump of under 1% to inflation, keeping 2023 inflation elevated at 4.8% even as global pressures started to wane.
The Government: A Boost in Revenue
From a government standpoint, GST has been a resounding success in terms of revenue generation and increase in tax base. The number of Taxpayers is increasing from year to year and the same thing can be said about the collection of GST.
The GST increase supports public spending that benefits Singaporeans, including better healthcare, education, and security. To manage the impact of GST, we absorb GST for publicly subsidised healthcare and education.
GST Reforms 2.0 are a complete update approved by the GST Council to make India's indirect tax system easier. The main goals of these reforms—such as simplifying tax rates, improving the system's structure, and upgrading technology—have been achieved to help better governance and make doing business easier.
How Do Tariffs Impact the Cost of Kia Cars? If tariffs are applied to Kia vehicles or their parts, dealerships may face higher costs, which can be passed on to consumers. This means potential price increases for popular Kia models in Harvey, LA, such as the Kia Sorento, Kia Sportage, and Kia Telluride.