From September 22, 2025, India’s Next-Gen GST Reform (GST 2.0) will significantly reduce prices of popular cars. The tax overhaul lowers GST rates on small cars, compact SUVs, and even large MPVs, making vehicles more affordable for Indian buyers.
Major GST Cuts for Passenger Cars
Under GST 2.0, the tax rate on most small petrol and diesel vehicles has been reduced from 28% to 18%, while compact SUVs and large vehicles will also see relief with cess restructuring.
Small Cars and Hatchbacks
- Maruti Suzuki Swift (1.2L Petrol Hatchback)
- Old Rate: 28% GST → New Rate: 18% GST
- Approx. Price Drop: ₹47,000
- Maruti Suzuki Dzire (1.2L Petrol Sedan)
- Old Rate: 28% GST → New Rate: 18% GST
- Approx. Price Drop: ₹47,000
- Hyundai Grand i10 (1.2L Petrol Hatchback)
- Old Rate: 28% GST → New Rate: 18% GST
- Approx. Price Drop: ₹43,000
- Tata Tiago (1.2L Petrol Hatchback)
- Old Rate: 28% GST → New Rate: 18% GST
- Approx. Price Drop: ₹50,000
Compact SUVs
- Tata Nexon (Petrol & Diesel)
- Old Rate: 28% GST → New Rate: 18% GST
- Approx. Price Drop: ₹80,000
- Hyundai Creta (1.5L/1.4L Compact SUV)
- Old Rate: 43% (28% GST + 15% cess) → New Rate: 40% (GST only, no cess)
- Price Drop: ~3%
Large SUVs & MPVs
- Mahindra Thar (SUV >4m/large engine)
- Old Rate: 45-50% (GST + cess) → New Rate: 40% (GST only)
- Price Drop: Significant (~5-10%)
- Mahindra Scorpio (Large MPV, >4m/diesel)
- Old Rate: 50% (28% GST + 22% cess) → New Rate: 40% (GST only)
- Price Drop: ~10%
- Toyota Innova Crysta (Large MPV, >4m/diesel)
- Old Rate: 50% (28% GST + 22% cess) → New Rate: 40% (GST only)
- Price Drop: ~10%
Also Read: Complete GST Rate Changes 2025: Full Item-Wise List from Next-Gen GST Reform
| Car Model | Engine / Segment | Old Tax Rate | New GST 2.0 Rate | Approx. Price Drop |
|---|---|---|---|---|
| Maruti Suzuki Swift | 1.2L Petrol Hatchback | 28% GST | 18% GST | ₹47,000 |
| Maruti Suzuki Dzire | 1.2L Petrol Sedan | 28% GST | 18% GST | ₹47,000 |
| Hyundai Grand i10 | 1.2L Petrol Hatchback | 28% GST | 18% GST | ₹43,000 |
| Tata Tiago | 1.2L Petrol Hatchback | 28% GST | 18% GST | ₹50,000 |
| Tata Nexon | Small SUV (Petrol & Diesel) | 28% GST | 18% GST | ₹80,000 |
| Hyundai Creta | Compact SUV (1.5L/1.4L) | 43% (28% + 15% cess) | 40% (GST only) | ~3% drop |
| Mahindra Thar | SUV (>4m / large engine) | 45–50% (GST + cess) | 40% (GST only) | ~5–10% drop |
| Mahindra Scorpio | Large MPV (>4m / diesel) | 50% (28% + 22% cess) | 40% (GST only) | ~10% drop |
| Toyota Innova Crysta | Large MPV (>4m / diesel) | 50% (28% + 22% cess) | 40% (GST only) | ~10% drop |
Why the GST 2.0 Reform Matters
The government’s decision to slash GST rates on vehicles is part of a broader effort to:
- Make cars more affordable for middle-class families.
- Boost demand in India’s automobile sector.
- Rationalize the tax structure by reducing cess and focusing on GST.
This change is expected to drive higher sales during the festive season, benefiting both consumers and automakers.
With GST 2.0 effective from September 22, 2025, buyers of small cars, SUVs, and MPVs will see price reductions ranging from ₹43,000 to nearly ₹80,000, and in some cases, up to 10% savings. The reform is set to be a game-changer for India’s auto industry, making vehicles more affordable while supporting demand recovery.
Tags: GST 2.0 car price drop, car GST rates India 2025, Maruti Swift GST 2025, Tata Nexon GST cut, Hyundai Creta GST 2025, Mahindra Thar GST 2.0, Toyota Innova GST reform, GST 2025 automobile rates
