With the implementation of new GST 2.0 rates, car and bike prices in India have seen a significant drop. Hatchbacks, SUVs, and bikes with engines below 350 cc will now attract an 18% GST. This will result in savings for customers ranging from ₹40,000 to ₹30 lakh, with companies directly passing on these benefits to consumers.
GST on Cars: Under the new GST 2.0 rates, effective from September 22, 2025, GST on vehicles with petrol engines below 1200 cc, diesel engines below 1500 cc, and bikes with engines below 350 cc has been reduced from 28% to 18%. This has led to price reductions of ₹40,000 to ₹30 lakh on cars and bikes from companies like Maruti Suzuki, Tata, Mahindra, Toyota, Honda, and Royal Enfield. Customers are directly seeing this benefit in the new prices, providing significant relief to the middle class looking to purchase new vehicles.
Which Vehicles Benefit Under GST 2.0?
According to the new rules, cars with petrol engines below 1200 cc and diesel engines below 1500 cc, which are less than 4 meters in length, will now fall under the 18 percent GST slab instead of 28 percent. Additionally, GST has also been reduced for bikes and scooters with engines below 350 cc. All other luxury and larger vehicles will be subject to a 40 percent GST.
Companies Directly Pass On Benefits to Customers
The biggest advantage of the new GST rates has been directly passed on to customers by companies. Manufacturers like Maruti Suzuki, Tata, Mahindra, Honda, Royal Enfield, and Toyota have reduced the prices of their cars and bikes. Entry-level cars are now up to ₹40,000 cheaper, while savings of up to ₹30 lakh are possible on premium SUVs.
New Prices for Mahindra Cars
Prices of major Mahindra cars have also seen a reduction. The Thar's price has decreased by up to ₹1.35 lakh. The Scorpio Classic is now ₹1.01 lakh cheaper. The Thar Roxx's price has been reduced by ₹1.33 lakh, and savings of up to ₹1.43 lakh are available on the XUV700. The Scorpio N is now cheaper by up to ₹1.45 lakh.
Significant Price Cuts for Toyota and Range Rover
Among Toyota's premium cars, the Legender's price has been reduced by ₹3.34 lakh, the Fortuner by ₹3.49 lakh, and the Hilux by up to ₹2.52 lakh. The Innova Hycross has seen a price cut of ₹1.15 lakh, and the Innova Crysta by ₹1.80 lakh. Significant relief has also been provided for Range Rover's premium cars. The Range Rover 3.0D SV LWB's price has been reduced by ₹27.4 lakh, the 4.4P SV LWB by ₹30.4 lakh, and the Range Rover Sport 4.4 SV Edition Two by up to ₹19.7 lakh. The Range Rover 3.0P Autobiography is cheaper by ₹18.3 lakh, and the Defender range by up to ₹18.6 lakh.
Significant Relief on Tata Cars Too
Customers have also received relief on Tata Motors' cars. The Tigor's price has been reduced by up to ₹80,000, and the Tiago is ₹75,000 cheaper. The Harrier's price has been cut by ₹1.40 lakh, and the Nexon's by up to ₹1.55 lakh. Savings of ₹65,000 are available on the Curvv, and the Safari's price has decreased by ₹1.45 lakh.
Kia and Maruti Suzuki Cars
Among Kia cars, the Syros is cheaper by ₹1.86 lakh, the Sonet by ₹1.64 lakh, the Carens by ₹48,513, the Seltos by ₹75,372, and the Carnival by up to ₹4.48 lakh. For Maruti Suzuki cars, the WagonR's price has been reduced by ₹57,000, the Alto K10 by ₹40,000, the Dzire by ₹61,000, the Swift by ₹58,000, the Jimny by ₹1.14 lakh, the Baleno by ₹60,000, and the Invicto by up to ₹2.25 lakh.
Relief for Bikes and Scooters Too
Prices of bikes and scooters with engines below 350 cc have also been cut. Honda's Activa 125 is cheaper by ₹8,259, Activa 110 by ₹7,874, Shine 125 by ₹7,443, and Shine 100 by ₹5,672. Savings of ₹18,598 are available on the CB350 Hness, ₹10,635 on the SP160, and up to ₹18,887 on the CB350. Prices for Royal Enfield and Suzuki bikes and scooters have also decreased following the new GST rates.
