BMW get massive price slash after GST revamp; X7 sees Rs 9 lakh drop

For buyers of premium brands like BMW, Mercedes-Benz and Audi, this translates into savings of 8–10 percent.

India’s auto market is bracing for major changes after the GST Council’s sweeping tax overhaul that slashed rates across categories and introduced a new simplified structure. While essentials get cheaper under the two-slab reform, luxury cars have been given a 'special slab' of 40 percent replacing the earlier 50 percent tax burden.

For buyers of premium brands like BMW, Mercedes-Benz and Audi, this translates into savings of 8–10 percent. BMW announced that its flagship X7 SUV will now cost Rs 9 lakh less, passing the benefit directly to customers.

Luxury segment: relief for buyers

Earlier, luxury vehicles were taxed at 28 percent GST plus a 20–22 percent compensation cess, taking the total levy close to 50 percent. Now, under the new structure, a flat 40 percent tax applies, making high-end models more competitive in India’s growing premium car market.

The GST reform is part of the government’s push towards a 'GST 2.0' model, with only two main slabs (5 percent and 18 percent) and a special 40 percent bracket for luxury and sin goods. The compensation cess, which had complicated compliance for automakers, will be phased out by October 31.

Tata Motors, Mahindra passes on benefits

Mass-market buyers will also feel the difference. Tata Motors announced price cuts of up to Rs 1.45 lakh across its passenger vehicle line-up, effective September 22, 2025.

According to company data:

Tata Tiago: down Rs 75,000 (ex-showroom Rs 4,99,990)
Tata Tigor: down Rs 80,000 (ex-showroom Rs 5,99,990)
Tata Altroz: down Rs 1.10 lakh (ex-showroom Rs 6,89,000)
Tata Punch: down Rs 85,000 (ex-showroom Rs 6,19,990)
Tata Nexon: down Rs 1.55 lakh (ex-showroom Rs 7,99,990)
Tata Curvv: down Rs 65,000 (ex-showroom Rs 9,99,990)
Tata Harrier: down Rs 1.40 lakh (ex-showroom Rs 14,99,990)
Tata Safari: down Rs 1.45 lakh (ex-showroom Rs 15,49,990)

Mahindra also joined the wave, announced it will fully pass on the GST 2.0 benefits to customers across its ICE SUV portfolio with immediate effect.

As a reduction in GST, M&M's popular models like the Thar, Scorpio, Bolero, XUV700, and Scorpio-N will now be available with substantial savings ranging from Rs 1.01 lakh to Rs 1.56 lakh, depending on the model and variant.
The Bolero and Bolero Neo are cheaper by up to Rs 1.27 lakh, while the XUV3XO Petrol gets a cut of Rs 1.40 lakh, and the XUV3XO Diesel leads with a reduction of Rs 1.56 lakh.