NextFin news, On Tuesday, September 23, 2025, the rollout of the new Goods and Services Tax (GST) reforms triggered a festival-like rush in automobile showrooms across India, marking a notable boost in consumer demand during the ongoing festive season.
Major automobile companies including Maruti Suzuki, Hyundai, Mahindra, and Tata Motors reported record sales and bookings. Maruti Suzuki alone received over 75,000 bookings on the first day of the GST reforms, according to BJP Member of Parliament Sambit Patra. Hyundai and Tata Motors also experienced unprecedented sales volumes, reflecting heightened market enthusiasm.
The GST reforms, which include significant reductions in tax rates for various categories and the withdrawal of the compensation cess, have been credited with creating a more favorable pricing environment for consumers. These changes effectively lowered the overall tax burden on vehicles, making them more affordable and stimulating demand.
India’s Chief Economic Advisor, V Anantha Nageswaran, highlighted in an exclusive interview that the tax cuts under GST 2.0, combined with income tax reliefs, are expected to inject upwards of ₹2.5 lakh crore into the economy. He noted that the multiplier effects of these reforms could further amplify economic growth beyond the static estimates.
Nageswaran also addressed concerns regarding state finances following the cessation of the compensation cess. He pointed out historical data showing that reductions in GST rates have not led to revenue declines for states, as increased transaction volumes and formalization of the economy compensate for lower rates. The rising trend in UPI transactions, which correlate strongly with GST revenues, supports this outlook.
The Chief Economic Advisor expressed confidence that the government’s fiscal deficit target of 4.4% of GDP for the current financial year remains achievable, supported by robust non-tax revenue growth and an extended festive season expected to last through Christmas and New Year.
The GST reforms have thus not only invigorated the automobile sector but also contributed to a broader positive sentiment in the market, reinforcing expectations of sustained economic momentum in the near term.
Sources: The Economic Times, The Indian Express, NDTV, IANS LIVE, and an exclusive interview with India’s Chief Economic Advisor V Anantha Nageswaran.
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