Following the September 2025 GST 2.0 reforms, the Land Rover Range Rover (4.4-litre petrol LWB) received the highest price reduction, with costs dropping by up to ₹30.4 lakh. In the luxury segment, Mercedes-AMG G-Wagen saw cuts of ₹25.65 lakh, while the BMW M8 Competition dropped by ₹13.6 lakh.
Petrol cars with the biggest price cuts after GST 2.0
Small cars (petrol ≤ 1200cc/diesel ≤ 1500cc, and length ≤ 4000mm), including compact SUVs and hybrids within limits, are taxed at 18%. All larger/higher-end cars and SUVs, including most full-size SUVs are taxed at 40% GST. Electric vehicles stay at a concessional GST rate of 5%.
Among the standout highlights, the steepest cut in percentage terms was seen in the case of Maruti Suzuki's S-Presso, at up to 27%, dropping its ex-showroom price to ₹3.49 lakh and underscoring the reforms' focus on budget buyers.
GST Cap on Car Purchases
When a business purchases a car, it can generally claim a GST credit for the GST included in the purchase price but only up to a capped amount. For the 2025–26 financial year, the car cost limit is $69,674, which means the maximum GST credit claimable is $6,334 (i.e. 1/11 of the limit).
Taking advantage of tax deductions: If you purchase a car through your small business, you'll be able to claim a variety of tax deductions for things like ownership, maintenance, and gas. You can also deduct trip expenses if you'll need to travel for work and take the company car.
The GST registration turnover limit is ₹40 lakhs for goods, ₹20 lakhs for services, and ₹10 lakhs for special category states.
Honda Cars India has revised prices across its lineup after the GST Reforms 2025. 🔹 The entire Honda Amaze range is now priced under ₹10 lakh. 🔹 Honda Elevate starts from ₹10.99 lakh (ex-showroom) 🔹 Honda City sees a price cut of up to ₹57,500.
Here's how much you stand to save with the revised new prices after the GST cut on Kia Cars: Kia Sonet– up to ₹1,64,471. Kia Syros– up to ₹1,86,003. Kia Seltos– up to ₹75,372.
What are the most expensive cars to tax?
Key Thresholds for 2025–26
This is the highest GST credit you can claim on a car purchase, calculated as one-eleventh of the car limit. If the car costs more than $69,674, your GST credit is capped at $6,334 (unless specific exceptions apply). Luxury Car Tax (LCT) thresholds: $91,387 for fuel-efficient vehicles.
GST on cement reduced from 28% to 18%, lowering housing and infrastructure costs. Healthcare made affordable with GST on medicines cut to 5%/Nil, while health insurance is made exempted from GST. Uniform 5% GST on drones introduced, supporting startups and the Make in India initiative.
Which Maruti Suzuki NEXA cars benefit the most from the GST change? NEXA models like Fronx, Baleno, Ignis, Jimny, Grand Vitara, XL6, and Invicto have seen noticeable price reductions after the GST cut.
The best times to buy a Honda are the end of the year (November/December) for maximum discounts as dealers clear inventory for new models, the end of the month/quarter to hit sales targets, during major holiday weekends (Memorial, Labor Day, etc.) for special sales, and when a new model year arrives (fall) to get deals on the outgoing year's stock. Shopping in winter (December-February) is also great for low-demand models like convertibles, while the end of the year offers great incentives like low financing.
GST 2.0 is a revised tax structure effective from September 22, 2025. For Toyota, it means lower GST rates across its lineup: 18% for sub-4m small cars and 40% for larger cars/SUVs.
As for which day of the week to go in, "Monday is usually the best day of the week to buy a car" since "showrooms will be the least busy," said MarketWatch. However, Tuesday or Wednesday can also be a good bet, especially in areas where dealerships aren't open on Sundays, said Edmunds.
The average APR on a loan for a new vehicle dipped to 6.6% in November, the lowest point of 2025. Edmunds analysts expect that downward trend to continue into 2026. Lower rates could help monthly payments, but only for shoppers with strong credit. For many buyers, the relief may feel modest.
GST impacts car prices directly by adding a tax to the vehicle's price. In 2025, GST rates on small petrol and diesel cars were reduced from 28% to 18%, lowering the price for buyers. This means you pay less when buying smaller, everyday cars. Electric vehicles enjoy a low GST of only 5%, encouraging cleaner choices.
The top 10% of the population, representing the highest income earners, is responsible for 26.63% of the total Household GST collected and 9.12% of the Total GST collected.
Payment amounts are recalculated every July
For example, the information from your 2024 tax return determines the GST/HST credit amount you get for the payment period from July 2025 to June 2026. You could get up to: $533 if you are a single individual. $698 if you are married or have a common-law partner.