New GST Rates: GST Cuts on Large SUVs & Luxury Cars: Toyota Fortuner, Mercedes-Benz GLS, & More Will Become Affordable
With the new GST slabs coming into effect, Large SUVs and Luxury cars may get cheaper by up to 10 percent\
Premium sedans, big muscular SUVs, and top-notch luxury cars have always been aspirational for many, and for that aspiration, they ask for a huge sum of money. A reason for their prices to be so high is the GST and compensation cess placed by the government. However, this is about to change as the new GST slab for these vehicles will kick in from September 22, making such vehicles slightly affordable.
What Changed?
Earlier, the GST applicable on all cars over 4 metres used to be 28 percent, and on top of the GST, a compensation cess was placed which ranged from 15 percent to 22 percent. Now, while the GST has been increased to 40 percent, the compensation cess has been completely removed, which lowers the overall tax applied.
Since all large SUVs and luxury cars are over 4 metres in length, they will all be placed under a single GST slab of 40 percent.
| Hybrid Passenger Vehicles | |||
| GST | Compensation Cess | Total Tax | |
| Old | 28% | 15% | 43% |
| New | 40% | 0 | 40% |
| Difference | +12% | 3% | |
Strong hybrid passenger vehicles like the Toyota Vellfire, Lexus LM, and BMW XM, which used to attract 43 percent total tax, will now ask for a GST of 40 percent.
| Passenger Vehicles popularly known as SUVs (Above 4m in length, above >1500cc engine & >170 mm Ground Clearance) | |||
| GST | Compensation Cess | Total Tax | |
| Old | 28% | 22% | 50% |
| New | 40% | 0 | 40% |
| Difference | +12% | 10% | |
All large SUVs which fulfil the criteria of length, engine size, and ground clearance used to have a total tax of 50 percent. This included cars like the Toyota Fortuner, Mercedes-Benz GLS, Jeep Wrangler, BMW X5, and more.
Under the new tax slab, the total tax on these cars will go down to 40 percent, resulting in a reduction of 10 percent, which is expected to be passed down to the customers.
| Vehicle Over 1500cc | |||
| GST | Compensation Cess | Total Tax | |
| Old | 28% | 20% | 48% |
| New | 40% | 0 | 40% |
| Difference | +12% | 8% | |
Luxury sedans like the Mercedes-Benz S-Class, Audi A6, BMW 7 Series and even performance cars made in the country will get a GST reduction of 8 percent.
Note: All imported cars whether CBUs (completely built up units) or CKDs (completely knocked down units) will have the same tax as before. 100 percent for CBUs and 50 percent for CKDs.
Also Read: GST Rate Cut For Cars: Cess Removed, All Cars To Get Cheaper
Other Benefits
The ex-showroom price of the vehicle consists of the factory price, GST, and compensation cess. Since the total tax will be reduced and the ex-showroom price will be lower, you’ll also need to pay a lower RTO tax. This will make your car’s on-road price more affordable.
With the new GST reforms, the cost of parts and components will be placed in the 5 percent slab instead of the previous 12 percent, and this may bring down the production cost of the vehicle, which will further reduce the factory price. However, even if this happens, the manufacturer may or may not choose to pass down these savings to the customer.
In any case, the cost of vehicles will go down due to the new GST norms.
Wait For New Prices
As mentioned earlier, these GST reductions will be applicable from September 22, and we expect manufacturers to announce the revised prices of their vehicles around the same date. If you are planning to buy a new car, we suggest you wait till the new prices are out.
When exactly the prices will be announced and how much the prices will go down is yet to be disclosed, but the new GST slabs will most definitely make large SUVs and luxury cars more affordable.
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Car News That Made Headlines Over The Past Week: Launch Of Renault Kiger Facelift Stole The Show Alongside Multiple Spyshots, Official Updates For Upcoming Maruti And VinFast EVs
Published On Aug 30, 2025 08:01 AM By Bikramjit
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This week saw a single new launch from Renault, besides multiple sneak peeks and details on upcoming cars
The past week in the Indian car industry saw the launch of the new Renault Kiger facelift, which dominated most of the headlines. The week also stayed exciting with multiple sightings of test mules of upcoming cars. Adding to the buzz, auto giants Maruti and VinFast put out confirmation on progress on their upcoming EVs: the e Vitara, VF6, and VF7. Let’s take a quick look at all that happened.
2025 Renault Kiger Facelift Launched
Renault launched the facelifted 2025 Kiger at Rs 6.30 lakh (ex-showroom). The sub-4m SUV gets a refreshed design, updated features, and continues with the same petrol engine options. Like the recently launched 2025 Triber, the Kiger also got new nomenclature for its personas as well as new exterior and interior colour schemes.
VinFast VF6 And VF7 Launch Date Confirmed
VinFast has confirmed the launch dates of its upcoming electric SUVs – VF6 and VF7. These two will be the first models from the Vietnamese carmaker on our shores and are being made at VinFast’s new plant in Thoothukudi, Tamil Nadu. Both EVs are already available for pre-booking with a fully refundable token amount of Rs 21,000.
Maruti e Vitara Production Commenced
Maruti has started production of its first electric SUV, the e Vitara, at the Hansalpur plant in Gujarat. Prime Minister Narendra Modi flagged off the very first unit. The made-in-India EV will also be exported to over 100 countries, including Japan.
New-Gen 2025 Hyundai Venue Interior Spied
The next-generation Hyundai Venue has been spotted testing in India, giving us our first real look at its revamped interior. The spy images reveal it will get a feature inspired by the bigger Creta and Alcazar. The dashboard layout has been redesigned, with there are also hints of some key feature updates.
Nex-Gen Kia Seltos Spied In India
The next-generation Kia Seltos has been spotted testing in India for the first time in Hyderabad. Before this, the SUV had already been seen on test runs twice in international markets. The latest spy shots reveal updated exterior details, including redesigned lighting elements, new alloy wheels, and a refreshed bumper design.
Upcoming Mahindra XUV700 Facelift Spied
Mahindra’s XUV700 facelift was spotted testing again, this time showing a sharper new front face, a redesigned bumper and fresh alloy wheels. The interior was previously spied, which hinted at a triple-screen setup on the dashboard. No major changes under the hood are expected, and the facelift is likely to hit our roads in early 2026.
Maruti Suzuki Jimny 5-door Sales Stopped In Australia
Suzuki has stopped deliveries of the 5-door Jimny (sold as Jimny XL) in Australia. The model is built in India’s Gurgaon plant and exported to global markets. The company says it is due to an unspecified issue with the stockyard and not any safety concerns. However, there’s no word yet on when sales will resume.
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