Cars to Get Cheaper! Big GST Cuts Bring Good News for Buyers

Why Everyone’s Talking About Cheaper Cars

Yes, you read that right—cars get cheaper in India. Not just a token cut, but a pretty meaningful difference across popular categories. The government’s latest GST reforms have reshuffled tax slabs, and the ripple effect is huge. From small hatchbacks to premium SUVs, and even two-wheelers, buyers stand to save big.

To be fair, there’s one small twist (or rather, one unlucky segment that won’t be celebrating). But let’s get into the details.

Sub-4 Meter Cars: The Biggest Winners

Let’s start with the most affordable category: cars under 4 meters with smaller engines (up to 1.2L petrol or 1.5L diesel). Earlier, buyers were paying around 29–31% GST on these models. Now? Just 18%.

That’s a game-changer.

Think of models like the Maruti Swift, Baleno, Dzire, Hyundai i20, Tata Punch, Nexon, Kia Sonet, or even Citroën C3. If you were eyeing a car under ₹10 lakhs, this new slab could save you anywhere between ₹1 lakh to ₹1.5 lakh—a big relief for middle-class buyers who usually stretch their budgets.

SUVs and Bigger Cars: Savings Get Serious

Now, here’s where it gets really interesting. SUVs above 4 meters or with engines larger than 1.2L (petrol) or 1.5L (diesel) have seen GST rates slide from 43–50% down to a flat 40%.

That might not sound dramatic at first glance, but when you’re talking about cars priced above ₹10 lakhs—or even in the ₹40–60 lakh range—it adds up fast.

For example:

• Toyota Fortuner GR Sport (₹62–63 lakh) could get ₹5–6 lakh cheaper.
• Mahindra XUV700? Expect savings of at least ₹1 lakh.
• Luxury SUVs from BMW, Audi, or Mercedes? Yep, they’re all in line for price drops too.

So if you were holding off on a bigger car thinking, “let’s wait for a better deal,” this might just be that moment.

Hybrid Cars Also Get a Push

Interestingly, hybrids are finally getting their due. The new GST on hybrid cars means models like the Toyota Hyryder and Maruti Grand Vitara could become more attractive. And considering how many buyers are caught between EVs and traditional petrol-diesels, this small nudge might just tilt the balance.

Bikes, Scooters & Three-Wheelers

It’s not just cars. Two-wheeler owners have good news too—at least up to a point.

• Motorcycles and scooters under 350cc (Splendor, Activa, Pulsar, Royal Enfield Classic 350) now fall under the 18% slab instead of 28%. That’s a solid win for the masses.
• But for bikes above 350cc, like superbikes or the Royal Enfield Interceptor, the tax actually went up from 31% to 40%. Tough luck if you had your heart set on a Ninja.

Three-wheelers, buses, and even tractors have all shifted to 18% GST. And here’s a bonus: car servicing and spare parts now attract a flat 18% instead of a messy mix of 18–28%. That means lower service bills too.

GST on Cars Above and Below ₹10 Lakhs

To simplify:

• GST on cars below ₹10 lakhs (sub-4m, small engines): 18%
• GST on cars above ₹10 lakhs / larger engines: 40%

So whether you’re budget hunting or going premium, the road ahead looks cheaper than before.

The Only Missing Piece: Fuel Under GST

Here’s the thing though. While cars are cheaper, fuel isn’t. Petrol and diesel remain outside GST, which means we still pay heavy VAT and central excise. Imagine if petrol also came under GST—prices could fall by ₹15–20 per litre easily. That’s probably the next big reform everyone’s waiting for.

FAQs

Final Thoughts

Honestly, it feels like a rare win for Indian car buyers. For once, taxes aren’t pushing prices up but actually pulling them down. Whether you’re planning a budget hatchback or a premium SUV, the timing couldn’t be better.