GST 2.0: How New GST Rates on Cars Are Impacting Prices
If you’ve been waiting for the right moment to buy a car, the latest new GST rates on cars may have just created an opportunity. The revised tax structure under GST 2.0 has led to notable price cuts across both mass-market and luxury car segments.
What Changed in GST
Under the revised structure, small cars and compact SUVs are now taxed at 18%, while larger cars and SUVs fall into a 40% slab. The changes have allowed automakers to pass on savings directly to customers, reducing the on-road cost significantly in many cases.
How Car Companies Responded
- Tata Motors announced price reductions across popular models such as the Tiago, Nexon, Harrier, and Safari. Buyers could see savings ranging from ₹75,000 to ₹1.55 lakh.
- Mahindra & Mahindra slashed prices on the Scorpio-N, XUV700, Thar, and Bolero, with benefits up to ₹1.56 lakh. This comes as the festive season demand is picking up.
- Hyundai Motor India cut prices by as much as ₹2.4 lakh on models like the Creta, Venue, Tucson, Verna, and Alcazar. Entry-level cars such as the i20 and Exter also saw reductions.
- MG Motor India lowered prices on the Astor, Hector, and Gloster, with benefits reaching up to ₹3.04 lakh.
- Kia India introduced cuts between ₹48,000 and ₹4.48 lakh, making higher-end models more accessible.
- Nissan reduced the Magnite’s price by up to ₹1 lakh, aiming to attract first-time buyers.
- Luxury brands such as BMW and Mercedes-Benz also joined in, offering reductions up to ₹11 lakh in some models, making premium cars relatively more attainable.
Why It Matters for Buyers
The timing could not have been better. With the festive season approaching, lower prices may encourage buyers who were on the fence to finally make their purchase. Dealers expect stronger showroom traffic, and some customers are even delaying purchases to benefit from the updated GST pricing starting this month.
Market and Stock Angle
Quick Comparison Snapshot
| Brand/Model | Max Price Reduction |
|---|---|
| Tata Motors (Nexon, Harrier) | ₹1.55 lakh |
| Mahindra (XUV700, Scorpio-N) | ₹1.56 lakh |
| Hyundai (Tucson, Creta) | ₹2.4 lakh |
| MG Motor (Gloster) | ₹3.04 lakh |
| Kia (Carnival, Seltos) | ₹4.48 lakh |
| Mercedes-Benz (Luxury segment) | ₹11 lakh |
Looking Ahead
With the new GST regime, affordability in the auto market has taken a sharp turn. Whether it’s first-time buyers eyeing compact cars or premium customers considering a luxury model, the price landscape has shifted in their favor.
Disclaimer
This article is for informational purposes only. Prices and tax changes mentioned are based on public announcements as of September 2025. Buyers should confirm final on-road prices with dealerships before making a purchase decision.
In short, the new GST rates cars update has created fresh opportunities for buyers and sparked new attention in auto stocks. Whether you’re tracking tatamotors share price or considering a Mahindra and Mahindra SUV, GST 2.0 is worth watching closely.
