GST 2.0 Cuts Car Prices in India: Full List of New Prices, Tax Rates & Savings

GST 2.0 Brings Relief to Car Buyers & Auto Industry

The Indian automotive market has received a festive season boost with GST 2.0, as the GST Council has reduced tax rates and abolished the additional compensation cess on cars. This reform is expected to make cars significantly more affordable across categories – from small hatchbacks to mid-size SUVs and even premium vehicles.

For years, car prices in India were weighed down by a combination of 28% GST plus a cess ranging between 1% to 22%, depending on size and engine capacity. With the cess now removed, the effective tax rate has dropped sharply, bringing meaningful savings for car buyers. Some manufactures like Tata motors, Mahindra and Renault has already announced the price cuts.

This move is a win-win for both buyers and the industry: customers enjoy lower car prices, while manufacturers can expect a surge in demand after months of flat sales.

GST Rate Changes Across Categories

1. Small Cars (Petrol under 1200cc, up to 4m)

• Old: 29% (28% GST + 1% Cess)
• New: 18% (no cess)
• Savings: 10-11%

✅ Popular Models: Maruti Alto K10, Wagon-R, Swift, Hyundai i20, Tata Tiago, Tata Punch.

2. Small Cars (Diesel under 1500cc, up to 4m)

• Old: 31% (28% + 3%)
• New: 18%
• Savings: 13%

✅ Popular Models: Tata Nexon Diesel, Mahindra XUV 3XO Diesel, Kia Sonet Diesel.

3. Mid-Size Cars (above 4m, up to 1500cc)

• Old: 45% (28% + 17%)
• New: 40%
• Savings: 5%

✅ Popular Models: Hyundai Creta, Kia Seltos, VW Virtus, Skoda Slavia, Maruti Ertiga.

4. SUVs (above 4m, >1500cc, >170mm ground clearance)

• Old: 50% (28% + 22%)
• New: 40%
• Savings: 10%

✅ Popular Models: Mahindra XUV700, Scorpio N, Toyota Fortuner.

5. Hybrids (above 4m)

• Old: 43% (28% + 15%)
• New: 40%
• Savings: 3%

✅ Popular Models: Toyota Hyryder, Maruti Grand Vitara , Honda City Hybrid.

6. Electric Vehicles (All categories)

• No change, remain at 5% GST.

7. Luxury Cars

• Old: 48-50%
• New: 40%
• Savings: 8-10%

Price Comparison – Popular Models After GST 2.0

Here’s a quick look at how much you can actually save under the revised GST rates:

Model	Current Price (₹ lakh)	Old Tax	New Tax	New Price (₹ lakh)	Savings
Maruti Brezza	8.69–13.98	45%	40%	8.39–13.50	₹30k–48k
Tata Nexon (Petrol)	8–14.7	29%	18%	7.32–13.44	₹68k–1.28L
Tata Nexon (Diesel)	10–15.6	31%	18%	9.01–14.05	₹99k–1.55L
Mahindra XUV 3XO (Petrol)	7.99–15.8	29%	18%	7.31–14.45	₹68k–1.35L
Mahindra XUV 3XO (Diesel)	9.99–14.99	31%	18%	9.00–13.55	₹99k–1.44L
Maruti Alto K10	4.23–6.21	29%	18%	3.76–5.53	₹47k–67k
Tata Tiago	5–8.55	29%	18%	4.45–7.61	₹55k–95k
Maruti Wagon-R	5.79–7.62	29%	18%	5.15–6.78	₹64k–84k
Maruti Swift	6.49–9.65	29%	18%	5.78–8.59	₹71k–1.06L
Hyundai i20	7.51–11.25	29%	18%	6.68–10.01	₹83k–1.24L
Hyundai i20 N Line	9.99–12.56	29%	18%	8.89–11.18	₹1.1L–1.38L

Impact on Buyers & Market

• Entry-level buyers: Cars like Alto, Wagon-R, Tiago, and Swift will now be much more accessible, encouraging first-time buyers.
• SUV lovers: Mid-size SUVs such as Nexon, Brezza, and Creta will see meaningful savings, making them even stronger value-for-money choices.
• Premium buyers: Big SUVs like XUV700 and Fortuner, as well as luxury sedans, will see significant price cuts running into lakhs, boosting premium segment sales.
• Festive boost: With the festive season around the corner, the timing of GST 2.0 is likely to drive up dealership footfalls and accelerate recovery for automakers.

The GST 2.0 reforms mark a game-changing moment for the Indian automotive industry. By removing the cess and lowering the effective tax burden, the government has made cars more affordable across segments. While the extent of savings passed on to customers will depend on manufacturer pricing strategies, one thing is certain – this is the best time in recent years to buy a new car.

At Carbae, we make sure you get the most out of these price drops with the latest on-road prices, offers, and deals from authorized dealerships near you.