From Maruti to Mercedes, Mahindra to JLR: Car prices cut by up to Rs 30 lakh as GST 2.0 takes effect

The new Goods and Services Tax (GST) 2.0 structure has officially rolled out in India from September 22, and it has brought down car prices across the board. From small hatchbacks to luxury SUVs, every segment has become cheaper. Depending on the model, customers are saving anywhere between Rs 40,000 and Rs 30 lakh on ex-showroom prices.

Why are prices lower now

Earlier, cars were taxed at 28% GST, and then an additional compensation cess of up to 22% was added on top. This pushed the total tax for some cars close to 50%, especially bigger SUVs and luxury sedans. Under GST 2.0, the system has been simplified. Smaller cars, compact SUVs and regular sedans now fall under an 18% slab, while bigger SUVs and premium models are taxed at 40% flat. Importantly, there is no separate cess anymore. Because of this, carmakers have been able to pass on the reduced tax burden directly to customers.

Mass-market cars see sharp cuts

The country's largest carmaker, Maruti Suzuki India, has announced some of the steepest reductions. The Alto K10, S-Presso, Swift, Dzire and Brezza are all cheaper by up to Rs 1.29 lakh. On hatchbacks like the Alto K10 and WagonR, the drop translates to almost 20-24% of their ex-showroom price. Maruti says this should help more two-wheeler owners shift to cars.

Tata Motors too has trimmed prices across its portfolio. The Tiago, Tigor, Punch, Altroz, Nexon, Curvv, Harrier and Safari all see revised tags. The Nexon is down by nearly Rs 1.55 lakh in certain trims, while the Harrier and Safari are cheaper by about Rs 1.48 lakh. The company expects these cuts to boost sales during the festive season.

Mahindra & Mahindra has also passed on big savings. The Bolero and Bolero Neo now come with benefits of up to Rs 2.56 lakh. Popular SUVs like the Thar, Scorpio-N, XUV3XO and XUV700 have also seen sizeable cuts. Mahindra has combined GST benefits with its festive offers to attract more buyers.

Hyundai Motor India has joined the list too. The i20, Venue, Verna, Creta and Tucson now cost less by up to Rs 2.40 lakh depending on the variant. With Tata and Mahindra giving tough competition, Hyundai is banking on these cuts to strengthen its position.

Toyota Kirloskar Motor has reduced prices on all models, including the popular Fortuner, Innova Crysta, Innova Hycross and Hilux. The reductions go up to Rs 3.49 lakh. This makes Toyota's MPVs and SUVs more competitive in their categories against rivals like MG, Mahindra and Kia.

Mega benefit for hatchbacks

Budget-conscious buyers are seeing the sharpest relief in the hatchback space. Maruti has lowered the Alto K10 price by up to Rs 1.08 lakh, the Celerio price by Rs 94,100, the WagonR price by up to Rs 79,600 and the Swift price by Rs 84,600. Tata's Tiago and Altroz are cheaper by up to Rs 75,000 and Rs 1.11 lakh, respectively. Hyundai's Grand i10 Nios and i20 now cost up to Rs 98,053 less. Renault has cut the Kwid's price by Rs 40,000-55,000.

These are significant numbers in the entry-level space, where even a Rs 50,000 reduction makes a big difference. With these cuts, hatchbacks are expected to draw more first-time car buyers.

Sedans and compact SUVs get festive push

The compact sedan and compact SUV categories are also seeing strong corrections. Cars like the Maruti Suzuki Dzire, Honda Amaze and Hyundai Aura are down by as much as Rs 95,500. Compact SUVs such as the Tata Punch, Maruti Brezza, Hyundai Venue, Kia Sonet, Mahindra XUV3XO and Skoda Kylaq have also become cheaper, giving more options for buyers looking to upgrade from hatchbacks.

Luxury cars see record price drops

The biggest cuts in absolute terms are in the luxury segment. With the cess scrapped, luxury internal combustion engine (ICE) cars now fall under a flat 40% slab. BMW has reduced the X7 price by nearly Rs 9 lakh. Jaguar Land Rover's Range Rover portfolio is down by as much as Rs 30.4 lakh. Mercedes-Benz, Audi and Volvo have also announced big reductions across models. This is expected to bring more buyers into luxury showrooms.

What this means for the market

The festive season has just started with the auspicious nine-day Navaratri festival, and the lower prices are expected to drive footfalls in showrooms. Analysts say automakers will be able to clear stock faster and improve sales in the second half of FY26. Finance companies are also seeing higher interest in car loans, as reduced ex-showroom prices mean smaller EMIs.

However, it is worth noting that electric vehicles (EVs) remain unaffected. EVs were already under the 5% GST slab, so their prices stay the same. Also, the on-road price will still vary depending on state taxes, registration fees and insurance.

At the Network18 Reforms Reloaded 2025 event today, Mercedes-Benz India MD and CEO Santosh Iyer said that over the next eight days, the industry expects to record the highest per-day car sales in India's history. He also said there is a lot of optimism that the festive period should deliver double-digit growth.