VECV passes GST 2.0 benefits to customers, Eicher trucks and buses to cost less

VE Commercial Vehicles (VECV), the joint venture between Volvo Group and Eicher Motors, has announced that it will fully transfer the benefits of the recently revised Goods and Services Tax (GST) rates to customers. The announcement comes on the first day of Navratri, making the festive season even more rewarding for transporters and fleet operators.

How much can customers save?

Eicher’s modern range of trucks and buses will now cost significantly less, thanks to the GST reduction from 28 per cent to 18 per cent on commercial vehicles. Depending on the model, customers can save up to ₹6 lakh on new purchases. The revised prices apply to all purchases made from September 22, 2025, onwards.

According to VECV, light and medium-duty (LMD) trucks will become cheaper by ₹1–2 lakh, heavy-duty (HD) trucks by ₹1.5–6 lakh, and buses by ₹1.1–3.4 lakh. Electric trucks and buses continue to attract the lower GST rate of just 5 per cent.

What does this mean for the CV industry?

Vinod Aggarwal, MD & CEO of VECV, welcomed the government’s decision, calling it a “landmark reform" that comes at a crucial time for the commercial vehicle sector. “This GST cut reduces acquisition costs, supports logistics efficiency in line with the PM Gati Shakti program, and stimulates economic growth through stronger consumer sentiment," he said.

Industry watchers believe the tax cut will help ease cost pressures on freight operators, spur demand in logistics, and encourage bus fleet modernisation by state and private operators. The move is also expected to make safer and fuel-efficient vehicles more affordable, accelerating the adoption of new-generation commercial vehicles.

Why does this matter for operators?

Lower acquisition costs translate directly into reduced Total Cost of Ownership (TCO) for truckers and bus operators. For small businesses and owner-drivers, this means improved profitability and better access to future-ready vehicles. Cheaper trucks are also expected to reduce freight rates, benefitting sectors such as agriculture, e-commerce, FMCG, cement, and steel.

New GST rules for Commercial vehicles

The GST Council’s reform, or ‘GST 2.0,’ simplifies the tax structure for commercial vehicles and related industries. Trucks, buses, and road tractors for semi-trailers have seen GST reduced from 28 per cent to 18 per cent. Tractors under 1800 cc now attract just 5 per cent GST, while tractor parts are also taxed at 5 per cent. Auto components for cars and bikes have dropped to 18 per cent.

The reduced GST rates are expected to boost demand for tractors in India, already the world’s largest tractor market, thereby enhancing agricultural mechanisation and productivity. For buses, the lower tax is likely to make public transport more affordable, encouraging a shift from private to shared mobility. In the trucking sector, reduced costs are expected to strengthen India’s logistics backbone and align with the PM Gati Shakti and National Logistics Policy targets.

In addition, GST on third-party insurance for goods carriage has been cut from 12 per cent to 5 per cent, offering further relief to truck owners. With services related to transport also rationalised, the reforms promise to reduce inflationary pressures and improve India’s export competitiveness.

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