The Indian government’s revised GST rates, which came into effect on September 22, 2025, are providing financial relief to consumers, particularly those in the market for new vehicles. The implementation of GST 2.0 has resulted in reduced prices for both cars and motorcycles. A key change is the reduction in GST for hatchback models, dropping from 28 percent to 18 percent. This benefit extends beyond hatchbacks, with SUVs and motorcycles also now subject to the 18 percent rate, a decrease from the previous 28 percent.
Specifically, cars with petrol engines under 1200cc, diesel engines under 1500cc, and a length under 4 meters are now taxed at the lower rate. Other vehicles will continue to be subject to the 40 percent GST. Additionally, motorcycles and scooters with engines under 350cc are also benefiting from reduced GST.
Manufacturers are passing on these tax savings to customers, leading to price reductions. Entry-level cars have become more affordable, with potential savings of up to Rs 40,000, while premium SUVs have seen price drops of up to Rs 30 lakh. Numerous brands, including Maruti Suzuki, Range Rover, Honda, and Royal Enfield, have adjusted their prices downwards.
**Mahindra Cars Price Changes:**
* Thar: Up to 1.35 lakh reduction.
* Scorpio Classic: Savings up to 1.01 lakh.
* Thar Roxx: Price cut up to 1.33 lakh.
* XUV700: Potential savings of up to 1.43 lakh.
* Scorpio N: Up to 1.45 lakh price reduction.
### Tata Cars Price Reductions:
* Tigor: Potential savings of 80 thousand.
* Tiago: Price decreased by Rs 75,000.
* Harrier: Price reduced by 1.40 lakh.
* Nexon: SUV price cut of 1.55 lakh.
* Curvv: Savings of 65 thousand.
* Safari: Price reduction of 1.45 lakh.
### Toyota Cars Price Reductions:
* Legender: Price reduced by up to 3.34 lakh.
* Fortuner: Price reduction up to 3.49 lakh.
* Hilux: Price reduced by up to 2.52 lakh.
* Innova Hycross: Savings of 1.15 lakh.
* Innova Crysta: Price reduced by 1.80 lakh.
### Range Rover Cars Price Reductions:
* Range Rover 3.0D SV LWB: Price reduced by 27.4 lakh.
* Range Rover 4.4P SV LWB: Price cut of 30.4 lakh.
* Range Rover Sport 4.4 SV Edition Two: Savings of 19.7 lakh.
* Range Rover 3.0P Autobiography: Price decreased by 18.3 lakh.
* Defender range: Price reduction of 18.6 lakh.
### Kia Cars Price Reductions:
* Syros: Price reduced by 1.86 lakh.
* Sonet: Price cut of 1.64 lakh.
* Carens: Savings of 48,513.
* Seltos: Price reduced by Rs 75,372.
* Carnival: Price reduction of 4.48 lakh.
### Maruti Suzuki Cars Price Reductions:
* WagonR: Savings of Rs 57,000.
* Alto K10: Price reduced by Rs 40,000.
* Dzire: Price reduced by Rs 61,000.
* Swift: Price reduction of Rs 58,000.
* Jimny: Up to 1.14 lakh price reduction.
* Baleno: Savings of Rs 60,000.
* Invicto: Price reduction of up to 2.25 lakh.
The price reductions also extend to scooters and motorcycles with engines smaller than 350cc. Companies such as Honda, TVS, and Royal Enfield have adjusted their pricing.
### Honda Two Wheelers Price Changes:
* Activa 125: Reduction of Rs 8,259.
* Activa 110: Price reduction of Rs 7,874.
* Shine 125: Savings of Rs 7,443.
* Shine 100: Savings of Rs 5,672.
* CB350 Hness: Save Rs 18,598.
* SP160: Savings of Rs 10,635.
* CB350: Price dropped by up to Rs 18,887.