Car Prices After GST 2.0: Rules For Advance bookings



Quick Summary
The new GST 2.0 regime introduces revised tax rates across various vehicle categories, generally leading to lower prices for consumers. Crucially, the applicable GST rate for advance bookings is determined by the car's delivery date, not the booking date. If your car is delivered on or after September 22, 2025, you'll benefit from the reduced GST rate on the final payment, and any excess paid will be refunded.

GST 2.0 has made various changes to tax rates on vehicles, with promises of benefits to consumers.

The GST rate changes vary significantly across different vehicle categories:

Car Prices After GST 2.0: Advance Booking Rules
Vehicle Category GST+Cess (Old) New GST Rate
Two-Wheelers up to 350cc Engine 28% 18%
Two-Wheelers >350cc Engine 31% 40%
Three-Wheeled Vehicles 28% 18%
Passenger Vehicles (Petrol, CNG, Diesel) ≤ 4m length 28-31% 18%
Passenger Vehicles - SUVs (>4m in length) 43-50% 40%
Commercial goods & Passenger Vehicle 28% 18%
Tractor (except road tractors of >1800cc engine) 12% 5%
Tractor (road tractors) 28% 18%
EV 5% 5%
Fuel Cell 12% 5%
 

Rules For Advance bookings

The GST rate is determined at the time of delivery, when the supply is considered to be made, not at the time of booking or advance payment

 
  • If an individual paid only a partial booking amount before 22-09-25 but the car delivery happens on or after the 22nd, the invoice will be generated after the new GST rate applies. Which means the balance payment will be calculated with the reduced GST, so the customer will automatically pay less at final settlement.
  • If the full payment is made earlier but delivery is after 22nd, refund must be given as invoice date decides tax rate.
  • If delivery was before 22nd September 2025, no refund is possible.

Refunds will apply only for vehicles delivered after the new GST rates, not for those already purchased.


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About the Author

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Finance Professional

I write about Income Tax, GST, TDS, RBI updates, government schemes, and personal finance in India. My focus is on simplifying complex tax and compliance topics into easy-to-understand guides that help readers stay updated with the latest financial rules, investment options, and regulatory changes.

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