The rollout of GST 2.0, effective September 22, 2025, has brought good news for car buyers across India. With the restructuring of tax slabs, several popular vehicles have become significantly more affordable—some by as much as ₹2.56 lakh.
What Changed Under GST 2.0
The GST Council scrapped the older 28% tax slab with compensation cess and introduced a simpler structure with 18% and 40% slabs depending on vehicle category. This move has translated into lower ex-showroom prices across hatchbacks, sedans, and SUVs.
Automakers have quickly passed on these benefits to customers, with some brands even adding festive discounts and exchange offers on top of the GST relief.
Top Models With Major Price Cuts
According to reports, the biggest beneficiaries are SUVs from Mahindra, Tata, Toyota, and Honda. The following models have seen the steepest reductions:
- Mahindra Bolero & Bolero Neo – Price cut of up to ₹1.27 lakh, with total benefits reaching ₹2.56 lakh when combined with festive offers.
- Mahindra XUV 3XO – GST benefit of nearly ₹1.56 lakh, plus additional discounts taking savings up to ₹2.46 lakh.
- Mahindra Scorpio-N & Thar – Discounts and tax benefits together shave off nearly ₹2 lakh.
- Mahindra XUV700 – One of the brand’s bestsellers now comes with a GST-linked drop and dealer incentives worth over ₹2 lakh.
- Tata Nexon & Punch – India’s top-selling compact SUVs now cheaper by up to ₹2 lakh including GST cuts and festive deals.
- Tata Harrier & Safari – Bigger SUVs see reductions in the range of ₹1.5–2 lakh.
- Toyota Innova Crysta – A long-time favourite among MPV buyers, the Innova has seen a drop of nearly ₹1.5 lakh.
- Toyota Fortuner – Premium SUV buyers get relief with a price cut close to ₹2 lakh.
- Honda City – The sedan segment is also benefiting, with the City now up to ₹1 lakh cheaper.
- Honda Elevate – The newly launched SUV sees a reduction of nearly ₹1.2 lakh under GST 2.0.
Why It Matters for Buyers
The new GST structure comes at the start of the festive season, a period when car sales traditionally surge. With lower base prices and attractive exchange bonuses, buyers stand to save significantly, especially in the SUV and MPV segments where cuts are the highest.
Industry experts believe GST 2.0 could revive demand in the auto sector, boost volumes for manufacturers, and make big-ticket vehicles more accessible to middle-class buyers.
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