Buying your dream car might have been an inspiration for you to excel in whatever you do. Sometimes, choosing the correct make, model, and technology may be daunting. However, if a government policy overhaul brings significant ease in fulfilling your dream (through a significant car price drop in India), it is worth carefully understanding the impact.
The Union Minister of Finance, Ms. Nirmala Sitharaman, announced GST 2.0 during the 56th meeting of the GST Council, held on September 3. The reduced GST rates for numerous products related to the heavy industries have led to a significant drop in car prices. This article helps you explore how the recent GST rate cuts are making your dream car more affordable.
Significant Changes in the GST Structure
The government announced a massive 10% cut in the GST on small cars, minimizing the GST cap from 28% to 18%.
The latest announcement will make cars in the affordable segment cheaper. It covers petrol engine cars with volumes less than 1,200cc and diesel engine cars with engine volumes below 1,500cc and lengths not exceeding 4 metres (approximately 13.12 feet). Additionally, auto components will attract 18% GST, making repairs and replacements more affordable.
Then, what about luxury cars? The government has simplified the tax structure for larger vehicles by reducing GST to a flat 40% and removing the cess. In the absence of cess, the overall effective tax on larger cars will decrease, making them more affordable for aspiring buyers.
Price Drops Across Major Brands
Major automotive brands in India have already announced their decisions to pass on the price benefit after the revamped GST rate cuts to the consumers.
Let’s dive into the most popular car brands in India and their tentative reduced prices:
Maruti Suzuki
Maruti Suzuki holds the highest market share of about 40% in the Indian car market, with the largest dealer and service network across the country. The Maruti Suzuki car price drop may encourage many aspirants to become the proud owners of their dream cars soon. Indians love their vehicles for fuel efficiency and affordable ownership costs.
Let’s see how GST 2.0 has lowered prices of their top-selling models:
| Model | Current Price | Old GST | New GST | Revised Price(Approx) | Price Drop (Approx) |
| Maruti Alto K10 | ₹4.23 – 6.21 L | 29% (28+1% cess) | 18% | ₹3.76 – 5.53 L | ₹47K – 68K |
| Maruti Swift | ₹6.49 – ₹9.64 L | 29% (28+1% cess) | 18% | ₹5.78 – 8.58 L | ₹71K – ₹1.06L |
| Maruti Suzuki Wagon R | ₹5.79 – 7.62 L | 29% (28+1% cess) | 18% | ₹5.15 – 6.78 L | ₹64k – 84k |
| Maruti Suzuki Brezza | ₹ 8.69 – 13.98 L | 45% (28+17% cess) | 40% | ₹8.39 – 13.50 L | ₹ 30k – 48k |
Mahindra & Mahindra
Another leading Indian brand, Mahindra & Mahindra, has announced a price drop of up to ₹1.6 lakhs on its cars. The reduced prices will be applicable from September 6. Car buyers love their cars for their rugged build and excellent off-road capabilities.
Here is how GST 2.0 will tentatively reduce the prices of their popular models:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Bolero/Neo | ₹9.97 – 12.18 L | 31% (28%+3% cess) | 18% | ₹9.1 – 10.91 L | ₹1.27 L |
| XUV3XO (Petrol) | ₹8.94 – 9.99 L | 29% (28%+1% cess) | 18% | ₹8.22 – 8.59 L | ₹1.40 L |
| XUV3XO (Diesel) | ₹9.99 – 14.99 L | 31% (28%+3% cess) | 18% | ₹8.99 – 13.43 L | ₹1.56 L |
| Thar 2WD (Diesel) | ₹11.50 – 14.29 L | 31% (28%+3% cess) | 18% | ₹10.50 – 12.94 L | ₹1.35 L |
| Thar 4WD (Diesel) | ₹16.12 – 23.39 L | 48% (28%+20%cess) | 40% | ₹15.48 – 22.38 L | ₹1.01 L |
| Scorpio Classic | ₹13.77 – 17.72 L | 48% (28%+20%cess) | 40% | ₹12.9 – 16.71 L | ₹1.01 L |
| Scorpio-N | ₹13.77 – 17.72 L | 48% (28%+20%cess) | 40% | ₹12.66 – 16.27 L | ₹1.45 L |
| Thar Roxx | ₹12.99 – 23.39 L | 48% (28%+20%cess) | 40% | ₹12.21 – 22.06 L | ₹1.33 L |
| XUV700 | ₹14.49 – 25.14 L | 48% (28%+20%cess) | 40% | ₹13.6 – 23.71 L | ₹1.43 L |
Toyota
Indian car buyers admire Toyota cars for their low maintenance needs, considerably better resale value, and bulletproof engines.
Here are the anticipated price drops for their popular models post GST rate cut announcement:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Innova Crysta | ₹19.99 – ₹27.18 L | 45-50%(28+17-22% cess) | 40% | ₹18.19 – ₹25.38 L | ₹1.80 L |
| Innova Hycross | ₹19.09 – ₹32.58 L | 45-50%(28+17-22% cess) | 40% | ₹17.94 – ₹31.43 L | ₹1.15 L |
| Urban Cruiser Hyryder | ₹11.34 – ₹20.19 L | 29-31% (28+1-3%cess) | 18% | ₹10.69 – ₹19.54 L | ₹0.65 L |
| Glanza | ₹6.99 – ₹10.00 L | 29-31% (28+1-3%cess) | 18% | ₹6.14 – ₹9.15 L | ₹0.85 L |
| Fortuner | ₹36.05 – ₹52.34 L | 50%(28+22% cess) | 40% | ₹32.56 – ₹48.85 L | ₹3.49 L |
Hyundai Motor India
The Korean-origin car brand has recently announced price cuts of up to ₹2.4 lacs on its various models in India after the GST rate cut. Hyundai is the second-largest carmaker in India, offering feature-packed cars with attractive interiors.
Let’s examine how the latest car price drop in India due to the revamped GST structure may reduce prices of their popular models:
| Model | Current Price | Old GST | New GST | Revised Price(Approx) | Price Drop (Approx) |
| Hyundai Creta | ₹11.11 – 20.92 L | 45% (28%+17% cess) | 40% | ₹10.39 – 20.22 L | Up to ₹72,145 |
| Hyundai Venue | ₹7.94 – 13.62 L | 31% (28%+3% cess) | 18% | ₹6.70 – ₹12.77 L | Up to ₹1,23,659 |
| Hyundai Exter | ₹6 – 10.51 L | 31% (28%+3% cess) | 18% | ₹5.52 – ₹9.52 L | Up to ₹89,209 |
| Hyundai i20 | ₹7.51 – 11.35 L | 31% (28%+3% cess) | 18% | ₹6.91 – 10.37 L | Up to ₹98,053 |
| Hyundai Aura | ₹6.54 – 9.11 L | 31% (28%+3% cess) | 18% | ₹6 – 8.33 L | Up to ₹78,465 |
| Hyundai Grand i10 Nios | ₹5.98 – 8.65 L | 29% (28%+1% cess) | 18% | ₹5.5 – 7.91 L | Up to ₹73,808 |
(Note: Approximate price difference taken from NDTV Auto)
Honda
Honda cars are known for their smooth and reliable engines, outstanding driving comfort, and premium interiors.
The following are tentative price drops anticipated after the recent GST rate cut:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Honda Amaze | ₹8.10 – 11.20 L | 29-31% (28+1-3%cess) | 18% | ₹7.5 – 10.35 L | ₹0.85 L |
| Honda City | ₹12.38 – 16.65 L | 40-45% (28+12-17% cess) | 40% | ₹12 – 16 L | ₹0.4-0.8 L |
Renault
Renault offers perfect entry-level family cars in the Indian market. Indian buyers admire their cars for stylish designs and spacious cabins.
Here is a tentative car price drop anticipated for their popular models:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Kwid | ₹4.30 – 5.90 L | 28% | 18% | ₹4.15 – ₹5.90 L | ₹40,095 – ₹55,095 |
| Triber | ₹5.76 – 8.60 L | 28% | 18% | ₹5.49 – ₹8.38 L | ₹53,695 – ₹80,195 |
| Kiger | ₹5.76 – 11.30 L | 28% | 18% | ₹5.30 – ₹10.29 L | ₹53,695 – ₹96,395 |
Tata Motors
Tata Motors dominates the EV and SUV segment, and their cars have robust build and 5-Star GNCAP safety ratings. Many aspirants would welcome a price drop for Tata cars, as the brand holds a considerable market share.
Here is a tentative price drop anticipation of their car models post GST 2.0:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Tata Nexon | ₹8 – 15.60 L | 29-31% (28+1-3%cess) | 18% | ₹6.45 – 14.05 L | ₹1.55 L |
| Tata Punch | ₹6 – 10.32 L | 29-31% (28+1-3%cess) | 18% | ₹5.52 – 9.47 L | ₹85 K |
| Tata Tiago | ₹5 – 8.55 L | 29-31% (28+1-3%cess) | 18% | ₹6 – 7.80 L | ₹75 K |
| Tata Altroz | ₹6.89 – 11.49 L | 29-31% (28+1-3%cess) | 18% | ₹6.34 – 10.39 L | ₹1.1 L |
| Tata Harrier | ₹15 – 26.7 L | 45% (28+17%cess) | 40% | ₹13.8 – 25.3 L | ₹1.4 L |
Volkwagen
Volkswagen offers globally-engineered cars with German precision. Buyers appreciate their car models for solid build quality, premium feel, and excellent driving dynamics.
Here is how the recent car price drop may bring down prices of their popular models:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Virtus | ₹11.56 – 19.40 L | 48-50% (28+20-22% cess) | 40% | ₹10.54 – ₹18.38 L | Up to ₹1.02 L |
| Taigun | ₹11.80 – 19.83 L | 48-50% (28+20-22% cess) | 40% | ₹10.37 – ₹15.06 | Up to ₹1.43 L |
| Golf | ₹53 L | 48-50% (28+20-22% cess) | 40% | ₹47.5 L | Up to ₹4 – 5.5 L |
Skoda
Skoda offers attractive cars that combine luxury with ultimate performance. Their car models have a fun-to-drive character, exceptional European styling, and robust engines.
Let’s take a look at potential price drops in their models after GST 2.0 implementation:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Kodiaq | ₹46.49 – 49.24 L | 48-50% (28+20-22% cess) | 40% | ₹43.59 – ₹45.94 L | Up to ₹3.30 L |
| Kushaq | ₹10.99 – 19.09 L | 48-50% (28+20-22% cess) | 40% | ₹10.33 – ₹18.43 L | Up to ₹0.66 L |
| Slavia | ₹10.49 – 18.33 L | 48-50% (28+20-22% cess) | 40% | ₹9.86 – ₹17.70 L | Up to ₹0.63 L |
MG Motor
MG Motors is a relatively new player in the Indian market, gaining popularity among buyers for its technology-loaded features, spacious and premium interiors, and a splendid driving experience —all at competitive prices.
Here is a tentative price drop (anticipated) after the recent GST revamp:
| Model | Current Price | Old GST | New GST | Revised Price (Approx) | Price Drop (Approx) |
| Hector | ₹14.25 – ₹23.64 L | 48-50% (28+20-22% cess) | 40% | ₹13.80 – ₹23.16 L | Up to ₹4.48 L |
| Astor | ₹9.98 – ₹15.70 L | 29-31% (28+1-3%cess) | 18% | ₹7.95 – ₹14.63 L | ₹1.07-2.03 L |
What Does the GST 2.0 Car Price Drops Mean for Buyers?
As Navaratri and Diwali, the most celebrated festive seasons in India, approach, the recent GST revision may bring a significant difference to the Indian car market.
Better Buying Power
If you have already done your homework and decided to buy your favourite car model, wait, and think again. The reduced GST rates may allow you to opt for cars with more spectacular looks, additional features, and more stylish interiors, keeping your EMI relatively unchanged.
Chance to Grab Festive Offers
Aspiring car buyers can expect car dealerships to offer additional incentives in conjunction with GST benefits during festivals. It has always been the buyer’s market!
Possible Segment Crossover
As the reduced prices due to dropping GST rates narrow down the price gaps, buyers can wisely research the available options to opt for cars in the higher segments conveniently. For instance, buyers from the higher middle class may consider purchasing an SUV instead of a hatchback, as they don’t need to pay a significant price difference.
The Bottom Line
The article takes you through the impact of the latest GST revamp on the Indian car market and how the car price drop affects market sentiments. This comprehensive guide will help you analyze the probable changes thoroughly and make an informed decision.
