Maruti Suzuki Share Price: Stock Races 9% To 52-Week High As GST Cuts Cheer Small Car Buyers

hares of Maruti Suzuki India Ltd. (MSIL) surged over 9% on Monday, hitting an intra-day high of Rs 14,125 on the National Stock Exchange (NSE), as investors cheered the government’s proposed overhaul of the Goods and Services Tax (GST) regime. The share price was also 52-day high today.  The stock closed the previous session at Rs 12,936, and was last trading at Rs 14,045, up 8.58%.

Furthermore, shares of leading automobile makers, including Hero MotoCorp, Maruti Suzuki India, Ashok Leyland, TVS Motor, and Bajaj Auto, surged between 5-8% in early trade on Monday, buoyed by expectations that the Goods and Services Tax (GST) on vehicles.

The rally lifted the Nifty Auto Index by over 4% on August 18, 2025, which opened at 24,804.65, up 2.8% from its previous close of 24,118.80, before touching an intraday high of 25,118.85.

The sharp rally came on the back of reports that the Centre is planning to rationalise GST rates, with small cars set to be the biggest beneficiaries. According to sources, the government is considering lowering the GST on small petrol and diesel cars to 18% from the current 28%, along with a reduction in cess. Larger cars, SUVs, and luxury vehicles, however, are likely to be placed under a new 40% special tax bracket once the 28% slab is scrapped.

Also Read: Auto Stocks Soar: Hero MotoCorp, Maruti Suzuki, Tata Motors Up 9% - What’s Driving the Rally? | Republic World

RC Bhargava, Chairman of Maruti Suzuki, hailed the proposed reforms as a “huge step” that could reshape the auto industry. “The restructuring will increase the competitiveness of Indian products. Opening of trade borders will bring in necessary competition, which will expand the market and ultimately benefit customers,” he told Reuters.

The overhaul is part of a broader simplification of the GST structure being pursued by Prime Minister Narendra Modi’s administration. The plan aims to collapse the existing multiple tax slabs into just two — 5% and 18%. The highest 28% slab would be eliminated, with so-called “sin goods” such as tobacco, pan masala, and luxury items attracting a new 40% levy.

In addition to automobiles, the reform is expected to ease costs for consumers in other key segments. Insurance premiums on health and life policies, currently taxed at 18%, could be slashed to 5% or even brought down to zero, people familiar with the matter said.

Auto Industry analysts believe that the proposed changes could give a much-needed push to the automobile sector, which has been grappling with cost pressures and demand fluctuations. Lower taxes on small cars would make them more affordable to middle-class buyers, potentially driving up sales volumes, as per auto industry analysts.

According to Puneet Gupta, Director of India & ASEAN Auto Market at S&P Global Mobility, "The ongoing GST restructuring could prove to be a game changer for the auto industry, particularly for the struggling two-wheeler and small-car segments. Beyond boosting demand, this reform will also shape the fuel landscape supporting the government’s push for cleaner, greener alternatives and reinforcing India’s long-term vision of achieving net-zero by 2070.