# India's Car Sales Rise with GST and Income Boost

> India's car sales surge as GST cuts and income growth drive demand despite price hikes.
- Title: India's Car Sales Rise with GST and Income Boost | Shortify
- Summary: India's car sales surge as GST cuts and income growth drive demand despite price hikes. India's car sales grew 29% year-on-year for vehicles with 18% GST…
- Keywords: india, car sales, gst, income growth, tata motors, passenger vehicles, suv popularity, hyundai, India's, Car, Sales, Rise
- Source: The Economic Times — https://economictimes.indiatimes.com/industry/auto/auto-news/indias-car-sales-crank-up-as-gst-gains-income-twist-top-price-hikes/articleshow/134495347.cms
- Author: Sharmistha Mukherjee
- Published: 2026-09-26T00:56:00+00:00
- Read time: 1 min
- Topics: india, car sales, gst, income growth, tata motors, passenger vehicles, suv popularity, hyundai
## Car prices rise 3% annually
Car prices have risen by about 3% over the past year amid inflationary pressures.
## GST cuts boost affordability
GST on cars below four metres was cut to 18% from 28% while larger vehicles saw effective rates reduced to 40% from 43-50% including cess.
## Disposable income grows 9.1%
Gross national disposable income increased by 9.1% in FY26 after rising 10.2% in FY25 and 10.9% in FY24.
## Passenger vehicles with 18% GST surge 29%
Sales of passenger vehicles in the 18% GST category rose 29% year-on-year to 1.24 million units.
## Tata Motors expects 10% industry growth
Tata Motors expects the overall industry to grow 10% during October-March and outpace the industry.
## SUVs gain popularity
Consumer preference remains skewed towards SUVs with hatchbacks and sedans seeing revived demand.
## Compact sedans grow to 350,000 units
Sales of compact sedans increased to 350,000 units last fiscal year from about 270,000 units in FY25.
## Key takeaway

India's car sales grew 29% year-on-year for vehicles with 18% GST rate due to income growth and GST cuts.