Mercedes, BMW cars witness massive price cuts; select models get cheaper by up to Rs 11 lakh after GST revision

With the government rationalising Goods and Services Tax (GST) rates, luxury carmakers like Mercedes-Benz India and BMW Group India have announced that they will be passing on the entire benefit to the customers.

Select internal combustion engine (ICE) SUVs and sedans of Mercedes-Benz will witness a price drop of up to Rs 11 lakh. On BMW models, the price reduction will be as high as Rs 9 lakh.

MERCEDES-BENZ CAR PRICE REDUCTION

"In line with our commitment to our customers, we are pleased to share that Mercedes-Benz India will be passing on the entire benefit of the GST reduction directly to the end customers," the company said in an official statement.

"Revised GST on all Mercedes-Benz cars, except electric vehicles (EVs) will now stand at 40%, with effect from September 22, 2025, subject to issuance of necessary notifications by the government," the luxury carmaker said, adding that the electric models will continue to attract 5% GST.

If we talk about the luxury SUVs of Mercedes-Benz, the GLA 220d 4MATIC AMG Line will see a price cut of Rs 3.8 lakh, the GLC 300 4MATIC of Rs 5.3 lakh, the GLE 450 4MATIC of Rs 8 lakh and the GLS 450d AMG Line of up to Rs 10 lakh.

In terms of luxury sedans, the A200d will become cheaper by Rs 2.6 lakh, the C300 AMG Line by Rs 3.7 lakh, the E-Class LWB 450 4MATIC by Rs 6 lakh and the S 450 4MATIC by up to Rs 11 lakh.Source - Mercedes-Benz India

BMW CAR PRICE REDUCTION

Coming to the luxury SUVs of BMW, the entry-level X1 will witness a price drop of Rs 1.8 lakh, the X5 of Rs 6.3 lakh and the X7 of up to Rs 9 lakh.
There will be handsome benefits for the BMW luxury sedan buyers as well, as the 2 Series Gran Coupe price will go down by Rs 1.6 lakh and that of the 3 Series LWB by Rs 3.4 lakh and the 5 Series LWB by up to Rs 4.1 lakh.Source - BMW Group India

Just for reference, the price reduction will be on the ex-showroom price and all the prices of Mercedes-Benz and BMW cars mentioned above are ex-showroom prices.

GST RATIONALISATION ON LUXURY CARS

The luxury ICE cars earlier attracted a total tax of 48% to 50%. This would include a GST of 28% and a compensation cess of 20% to 22%, depending on the engine capacity and body type of the model.

However, with GST rationalisation, all luxury ICE cars have been placed in a uniform 40% slab. Also, there is no compensation cess on vehicles now. However, the EVs are still in the 5% GST slab.

The new GST rates will become effective from September 22. Several carmakers, be it mass-market players or luxury players, have already announced that they would pass on the entire benefit of the lower taxes to their customers.

LUXURY CAR MARKET IN INDIA

At around 51,500 units in FY25, the luxury car market in India crossed cumulative volumes of 50,000 units for the first time ever during a fiscal. It was led by Mercedes-Benz, which sold 18,928 units, followed by BMW at 15,266 units and Jaguar Land Rover at 6,183 units.