Union Budget 2025: Auto industry seeks simplified GST structure

Ahead of the Union Budget 2025, the automobile sector has expressed the need for a streamlined Goods and Services Tax (GST) rate structure and a simplified classification system for automobiles and auto components. Industry stakeholders argue that the current system, which uses the Harmonised System of Nomenclature (HSN), has created complexities and led to incorrect classifications, increasing challenges for auto companies.

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The sector has welcomed the government's previous initiatives, including support for electric vehicle (EV) adoption and the promotion of research and development. However, industry representatives stress that resolving issues related to GST classification is crucial for smoother operations and better alignment with global standards.

The demand for a more transparent and efficient GST system is one of the key expectations from the auto industry as Finance Minister Nirmala Sitharaman prepares to present the Union Budget on February 1, 2025. With the auto industry playing a significant role in India’s economy, stakeholders believe that these reforms could drive growth, especially in the electric vehicle and component manufacturing sectors.

As the budget date approaches, the auto industry remains hopeful that the government will address these longstanding concerns, paving the way for enhanced competitiveness and improved regulatory clarity.