As per the new rates, taxes on small cars, bikes up to 350cc, and three-wheelers have been cut to 18%, down from 28% earlier. GST has also been reduced from 28% to 18% on buses, trucks, and ambulances. There is a uniform rate of 18% on all auto parts. The BSE Auto index closed 0.69% higher at 58,129. On the other hand, the benchmark equity index BSE Sensex settled 0.19% up at 80,718. While sharing his views on the new rate slab and auto sector, Heet Chheda of Choice Institutional Equities said that the rationalisation of GST rates is a huge positive for the automobile sector, along with the implementation date of September 22, 2025 - the first day of Navratri. This addresses concerns regarding delayed sales with the onset of the festive season. Shares of Mahindra & Mahindra advanced more than 5% on Thursday. Eicher Motors and TVS Motor Company also gained 1.11% and 0.98%, respectively. Chheda further added that the rise of GST on large cars is overall a positive at the 40% rate and the removal of compensation cess (earlier the total tax including cess was 43-50%). "M&M is a major beneficiary with all the changes being a positive for the company (Passenger vehicles, Tractors, Commercial vehicles). The change in GST rates for small car segment is positive for Maruti Suzuki also as the company is the largest manufacturer of small cars," he said. He further added that TVS, Bajaj Auto, and Hero MotoCorp are also set to benefit from the GST reduction for 2Ws. "TVS and Bajaj will also benefit from the reduction in rate for the 3W segment. Eicher Motors will benefit from the rate changes for <350 cc motorcycles (90% of domestic sales), while the rate change to 40% for >350 cc motorcycles (10% of domestic sales) will be a small negative. The reduction in GST for the trucks and bus segment is a positive for Ashok Leyland," Chheda said. Uno Minda and Apollo Tyres gained 0.14% and 0.13%, respectively. Chheda said that auto ancillaries are set to benefit overall as lower vehicle tax rates will likely increase vehicle sales and production. This growth will drive higher demand for auto parts and components, positively impacting ancillary companies across the industry. According to auto sector experts, overall vehicles see decent benefit of GST reduction as most of the categories have seen GST reduction except for motorcycles above 350cc, a negligible market in India. "The GST cut on small cars under 1.2L is a game-changer - bringing real relief to consumers and firing up demand in the mass segment. With festive tailwinds from Navratri to Diwali, entry-level cars are set for a strong comeback," said Vivek Sharma, Principal analyst-Powertrain forecast, S&P Global Mobility.