The Indian automobile industry is witnessing a significant shift in pricing thanks to the recently implemented GST 2.0 reforms. Effective from September 22, 2025, the Goods and Services Tax (GST) rate rationalization has prompted automakers across the country to reduce prices of their vehicles. These changes are designed to make car ownership more affordable, boost sales during the festive season, and provide long-term benefits to consumers. From popular mass-market brands like Maruti, Hyundai, Kia, Tata, and Mahindra to premium and luxury players including Mercedes-Benz, Audi, BMW, and Jaguar Land Rover, virtually all segments of cars have been impacted.

Understanding GST 2.0 and Its Impact on Car Prices

The government announced a sweeping GST rationalization on 4 September 2025, marking one of the most significant reforms in India’s indirect taxation since the GST was introduced in July 2017. The previous four-tier GST structure—5%, 12%, 18%, and 28%—has now been simplified to two primary tax slabs: 5% for essential goods and 18% for discretionary items. A new 40% tax bracket has been introduced for luxury products, including high-end cars and tobacco.

To streamline taxation in the automobile sector, the GST Council also redefined the criteria for vehicle taxation:

• Small cars: Less than 4 meters in length, with petrol engines under 1,200 cc and diesel engines under 1,500 cc, taxed at 18%.

• Luxury or bigger cars: More than 4 meters in length, petrol engines over 1,200 cc, and diesel engines over 1,500 cc, taxed at 40%.

• Hybrid vehicles: Taxed according to the same criteria as above.

• Electric vehicles (EVs): Continue to attract the lowest 5% GST rate.

This restructuring ensures that small, fuel-efficient, and budget-friendly vehicles become significantly more affordable, while luxury and high-performance cars continue to cater to premium buyers.

1. Maruti Suzuki: Affordable Cars Get Cheaper

Maruti Suzuki, India’s largest car manufacturer, has passed on the full benefits of GST 2.0 to its customers across both Arena and Nexa showrooms. Price reductions are substantial, with popular models now cheaper by up to ₹1.29 lakh.

Some highlights include:

• Alto K10: Reduced by ₹1,07,600, now priced at ₹3,69,900

• Grand Vitara: Reduced by ₹1,07,600, now at ₹10,76,500

• S-Presso, Swift, Dzire, Brezza, Fronx: Price cuts ranging from ₹71,300 to ₹1,12,700

The GST reduction from 28% to 18% on small cars has made Maruti’s compact, hybrid, and small SUVs notably more accessible. Even the newly launched Victoris compact SUV benefits from this rationalization, with prices starting from ₹10,49,900 and topping ₹19,98,900 for the hybrid variant.

Maruti Suzuki Chairman RC Bhargava emphasized that the GST reforms will increase competitiveness, enhance efficiency, and encourage consumer spending. Analysts expect these price reductions to revive demand in India’s passenger vehicle market, especially in budget and compact SUV segments, just in time for the festive season.

Full Model-wise Price Cuts for Maruti Suzuki After GST 2.0:

2. Kia: Up to ₹4.48 Lakh Savings

Kia India has passed on the GST benefits to its entire internal combustion engine (ICE) lineup starting September 22, 2025. Price reductions range from ₹48,513 to a whopping ₹4,48,542 for the Kia Carnival, the brand’s flagship MPV.

• Kia Sonet: Up to ₹1,64,471

• Kia Syros: Up to ₹1,86,003

• Kia Seltos: Up to ₹75,372

• Kia Carens: Up to ₹48,513

• Kia Carens Clavis: Up to ₹78,674

• Kia Carnival: Up to ₹4,48,542

Kia MD & CEO Gwanggu Lee highlighted that these reductions make mobility more accessible and stimulate festive-season demand, making it the perfect time to buy Kia vehicles.

3. Tata Motors: Up to ₹1.55 Lakh Off

Tata cars now enjoy reductions of up to ₹1.55 lakh. Premium models such as the Tata Harrier, Tata Safari, and Tata Nexon see cuts over ₹1 lakh, while small cars like Tiago, Tigor, and Punch get reductions of up to ₹85,000. Even the Tata Curvv receives modest savings under the revised GST slabs.

4. Mahindra: Full Benefits Immediately

Mahindra passed on the GST 2.0 benefits immediately to its entire lineup, including Thar Roxx, Scorpio N, Bolero, XUV700, and XUV 3XO. Price reductions for all models exceed ₹1 lakh, reinforcing Mahindra’s commitment to affordability and customer-centric pricing.

5. Hyundai: Up to ₹2.4 Lakh Savings

Hyundai has reduced prices for its cars by up to ₹2.4 lakh, effective September 22, 2025.

• Tucson: Highest reduction

• Grand i10 Nios, Aura, Creta, Alcazar: Over ₹70,000 savings

These reductions target both compact city cars and mid-size SUVs, enhancing affordability across Hyundai’s popular portfolio.

6. Renault: Up to ₹96,000 Off

Renault offers savings on sub-1,200 cc models such as the Kwid, Triber, and Kiger. The Triber MPV enjoys the largest cut. Prices are effective from September 22, 2025, ensuring buyers can benefit immediately.

7. Nissan: Magnite Gets Cheaper

Nissan has passed on the GST benefits for its subcompact Magnite SUV, with top-spec variants now up to ₹1 lakh cheaper. However, details for the flagship Nissan X-Trail remain pending.

8. Toyota: Up to ₹3.49 Lakh Savings

Toyota’s most popular model, the Fortuner, benefits from a ₹3.49 lakh reduction. Other models like the Vellfire, Innova Crysta, and Innova Hycross also see significant price cuts of over ₹1 lakh, enhancing Toyota’s appeal across premium and family SUV segments.

9. Honda: Up to ₹95,500 Off

Honda has revised prices across its lineup, including the Amaze (both generations), City, and Elevate, with reductions up to ₹95,500 effective September 22, 2025.

10. MG Motor: Up to ₹3 Lakh Savings

MG’s ICE lineup—Astor, Hector, and Gloster—benefits from GST reductions up to ₹3 lakh. Additionally, MG offers 100% on-road finance and a three-month repayment break to further support buyers.

11. Volkswagen: Up to ₹3.27 Lakh Off

Volkswagen has reduced prices for models like Virtus, Taigun, and Tiguan R Line, with the flagship Tiguan R Line SUV enjoying the steepest cut.

12. Skoda: Up to ₹3.28 Lakh Savings

Skoda’s flagship Kodiaq gets the maximum reduction, while other models enjoy limited-time offers for immediate delivery, excluding the Skoda Kylq sub-4m SUV.

13. Jeep: Up to ₹4.84 Lakh Off

Jeep has passed on GST benefits to all models, including Compass, Meridian, Wrangler, and Grand Cherokee, with the Wrangler seeing the highest savings.

14. Citroen: Up to ₹2.7 Lakh Off

Citroen India offers GST reductions across its portfolio, with mass-market models like C3 and Aircross receiving more modest benefits.

15. Mercedes-Benz: Up to ₹25 Lakh Off

Luxury marque Mercedes-Benz offers dramatic reductions across models such as A-Class Limousine, C-Class, E-Class, S-Class, GLA, GLC, GLS, Maybach, and AMG variants. These reductions bring high-end cars within reach for more buyers.

16. BMW: Major Price Cuts

BMW India has passed on GST benefits to models including the 2 Series, 3 Series LWB, 5 Series LWB, X1, X5, and X7, making premium ownership more accessible.

17. Audi: Savings Between ₹2.6 Lakh and ₹7.8 Lakh

Audi has revised prices across its entire lineup, with the flagship Q8 SUV receiving the steepest cut. Other models like A4, A6, Q3, Q5, and Q7 also enjoy significant reductions.

18. Jaguar Land Rover: Up to ₹30.4 Lakh Off

JLR India has announced massive price cuts, with Range Rover series seeing up to ₹30.4 lakh in savings. Popular SUVs like the Defender and Discovery also enjoy substantial reductions, making luxury ownership more attainable.

What This Means for Indian Car Buyers

The GST 2.0 reforms are perfectly timed for India’s festive season, traditionally the peak period for car sales. Consumers can now buy compact cars, mid-size SUVs, or premium vehicles at historically low prices. This move is expected to boost demand, encourage personal mobility, and stimulate India’s automobile market across all segments—from budget-friendly hatchbacks to high-end luxury SUVs.

For automakers, these revisions not only help pass on the benefits of taxation but also strengthen brand presence, enhance competitiveness, and incentivise customers to upgrade to newer models.

The GST 2.0 rationalisation has effectively lowered car ownership costs across India. By reducing tax rates and defining vehicle categories more clearly, the government has provided both affordability and clarity to buyers. With Maruti, Hyundai, Kia, Tata, Mahindra, Toyota, Honda, Renault, MG, Volkswagen, Skoda, Jeep, Citroen, Mercedes-Benz, BMW, Audi, and JLR all passing on benefits to their customers, this is arguably one of the largest coordinated price corrections in India’s automobile history. Whether you are looking for a small city car, a family SUV, or a luxury vehicle, the timing couldn’t be better to explore the Indian car market.

With inputs from agencies

Image Source: Multiple agencies

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