Small Cars May See GST Rate Cut

India aims to slash taxes on small cars and insurance premiums as part of a sweeping reform of its goods and services tax (GST), a government official said on Monday, sparking a rally in Indian stock markets.

- Reuters

Prime Minister Narendra Modi's administration revealed plans over the weekend for the largest tax overhaul since 2017, with consumer, auto and insurance companies likely to emerge as the biggest winners when product prices drop from October, once the reform is approved.

The federal government has suggested lowering GST on small petrol and diesel cars to 18% from the current 28%, said the official who is directly involved in the matter.

The consumption tax on health and life insurance premiums may also be lowered to 5% or even zero from 18% currently, the same official said.