Which Cars Will Get Cheaper After GST Revamp? Swift, i10, Tata Harrier, Brezza, Skoda To Cost Less

Car and SUV prices are set to fall from September 22 following the recent GST Council meeting. The new GST structure will particularly benefit smaller vehicles, including cars under four meters with engines below 1,200cc for petrol and 1,500cc for diesel. The tax rate on these vehicles has been reduced from 28% to 18%.

Larger cars and SUVs, which previously faced tax rates of around 50% due to an additional cess, will also see a price reduction as they now fall under the new 40% "sin/luxury" GST slab. The Finance Minister, Nirmala Sitharaman, stated that this decision aims to provide relief to the common person.

This tax reduction will benefit a wide range of automakers, including Maruti, Hyundai, Tata Motors, and Renault, as well as two-wheeler companies like TVS and Honda. Even luxury car brands such as Mercedes and BMW will see their prices drop as they move to the new 40% tax bracket.

Small cars, defined as petrol/LPG/CNG vehicles with up to 1,200 cc engines and diesel vehicles up to 1,500 cc, under 4 meters in length-will be taxed at 18% GST (down from 28% plus cess)

Cars exceeding 4 meters in length or with engine sizes above 1,200 cc (petrol) or 1,500 cc (diesel), including hybrids beyond these specs, now fall under the 40% luxury slab.

Although GST increases to 40%, the compensation cess (17-22%) has been removed-so the overall tax burden may actually dip slightly for some models.

Electric vehicles (EVs) continue enjoying 5% GST, signaling sustained support for clean mobility.

Actual savings depend on model price and whether dealerships pass on the complete benefit.

• Hyundai models: Estimates suggest price drops of ₹60,000 (Grand i10 Nios), ₹75,000 (i20), ₹90,000 (i20 N Line), ₹60,000 (Exter), ₹65,000 (Aura), and up to ₹1.2 lakh for Venue N Line.
• Models like Tata Altroz, Maruti Swift, Hyundai i10/i20, Renault Kwid will benefit; SUVs like Tata Harrier, XUV 700, Grand Vitara, Hyundai Creta will see minor relief.Hatchbacks (Alto, Wagon R, i10): ₹40k-₹60k savings.
• Mid Sedan (City, Verna): ₹50k-₹80k.
• SUVs (Creta, XUV700, Fortuner): ₹75k-₹2 lakh

Summary: Cars Likely to Become Cheaper

Major beneficiaries: Small hatchbacks and compact cars (e.g., Maruti Swift, Hyundai Grand i10/i20, Tata Tiago/Punch, Renault Kwid, Maruti Wagon R).

Compact SUVs like Hyundai Venue, Brezza also benefit slightly.

Mid-/Large-size SUVs & premium cars see modest tax relief but remain relatively expensive.

EVs retain their low-tax advantage at 5% GST.

Good Time to Shop?

Yes, if you're looking to buy a small car, especially before the festive season, waiting until after September 22, 2025 could help you lock in those GST savings. Models across hatchback and compact SUV segments are expected to be ₹50k-₹1 lakh cheaper.