India raises GST on old and used vehicles under the margin scheme, including EVs, from 12% to 18%
This page records one dated change. For the rules in India as they stand today, see the India guide →
- Jurisdiction
- India
- Tax
- GST
- Change type
- Rate change
- Status
- In force
- Impact
- Action required
- Announced
- 16 January 2025
- Effective
- 16 January 2025
- Instrument
- IN-NOTIFICATION-04-2025-Central-Tax-Rate
- Authority
- GST Council / CBIC (Ministry of Finance, Department of Revenue)
- Verified
- Fetched from official source · high confidence
Dealers and other businesses supplying old and used vehicles, including electric vehicles, under the margin scheme of Notification No. 8/2018-Central Tax (Rate).
Dealers and businesses supplying old and used vehicles under the margin scheme (Notification 8/2018-CTR) in S.No.4 ('all old and used vehicles other than' the larger petrol/diesel vehicles and SUVs in S.No.1-3, so including EVs) must charge 9% CGST (18% total) instead of 6% (12% total) from 16 January 2025. S.No.1-3 vehicles were already at 9% CGST (18% total), so all old and used vehicles under the scheme are now at 18%. Tax is on the supplier's margin only where the supplier has not availed input tax credit on the vehicle.
CBIC Notification No. 04/2025-Central Tax (Rate) dated 16 January 2025 (immediate effect), issued on the 55th GST Council's recommendations (21 December 2024), amends Notification No. 8/2018-Central Tax (Rate) to raise the CGST rate in Table S. No. 4 ('All Old and used Vehicles other than those mentioned from S. No. 1 to S.No.3', which includes EVs) from 6% to 9% (total GST 12%→18%). This aligns them with the larger petrol/LPG/CNG vehicles (≥1200cc and ≥4000mm), diesel vehicles (≥1500cc and ≥4000mm) and SUVs in S. No. 1-3, which were already at 9% CGST (18% total). Under 8/2018 the tax applies on the supplier's margin, provided the supplier has not availed input tax credit on the vehicle.
What changed in detail
Notification No. 04/2025-Central Tax (Rate), dated 16 January 2025 and issued on the recommendations of the 55th GST Council (21 December 2024), amends Notification No. 8/2018-Central Tax (Rate) of 25 January 2018. That notification sets concessional rates for old and used vehicles.
The amendment substitutes 9% for 6% as the central tax rate against S. No. 4 of its table, “All Old and used Vehicles other than those mentioned from S. No. 1 to S.No.3”. The entry includes electric vehicles. With the matching state tax, the total GST on these vehicles rises from 12% to 18%. The notification came into force with immediate effect.
S. No. 1 to 3 cover larger petrol, LPG and CNG vehicles (1200cc or more and 4000mm or longer), larger diesel vehicles (1500cc or more and 4000mm or longer) and SUVs. They were already at 9% central tax (18% in total), so after the change every old and used vehicle under the scheme is taxed at 18%.
Under Notification 8/2018 the tax applies to the supplier’s margin rather than the full sale price, but only where the supplier has not taken input tax credit on the vehicle.
What it means
The change aligned smaller used cars and used EVs with the larger vehicles, so the used-vehicle trade now has a single 18% rate on margin. Because the tax falls on the margin, the actual cost to a dealer depends on the gap between its purchase and sale prices, not on the vehicle’s value.
The rate is still in force in November 2026. The 56th GST Council’s September 2025 overhaul did not change it: Notification 12/2025-Central Tax (Rate), effective 22 September 2025, only updated a schedule reference in Notification 8/2018, leaving used vehicles at 18% on the margin.
Proof
In the said notification, in the TABLE, against S. No. 4, in column (4), for the entry “6%”, the entry “9%” shall be substituted.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Notification No. 04/2025-Central Tax (Rate), 16 January 2025 · gstcouncil.gov.in