GST Cut on Cars 2025 — A WOW Factor for Indian Buyers
Clear, classy guide: what changed in GST, how much you save, who benefits, and smart buying tips for 2025.
Short version: The government reduced GST on select passenger vehicles in 2025 — buyers see immediate price relief, increased affordability and a boost to EV adoption.
What changed? — Clear numbers
The 2025 budget announced a reduction in Goods & Services Tax (GST) on certain categories of cars. Below are simplified example brackets (official notifications and model-level applicability should be verified with dealers):
| Vehicle Category | GST (Before 2025) | GST (After cut) | Estimated consumer saving* |
|---|---|---|---|
| Small petrol hatchbacks (≤ 1200cc) | 28% | 18% | ~6–8% off ex-showroom price |
| Compact SUVs (≤ 1500cc) | 28% | 20% | ~5–9% off ex-showroom price |
| Electric vehicles (EVs) — select models | 18% | 5% (reduced) | ~10–18% off ex-showroom price |
| Luxury cars (above threshold) | 28% + cess | unchanged (targeted relief) | 0% (no change) |
*Actual savings depend on model, on-road costs (insurance, road tax), dealer discounts and cess adjustments. Always verify the official notification and dealer invoice.
Popular Cars Under 1200cc (Eligible for GST Relief)
| Car Model | Engine (cc) | Segment | Approx. Ex-Showroom Price (₹) |
|---|---|---|---|
| Maruti Suzuki Alto K10 | 998 cc | Hatchback | 3.9 – 5.8 lakh |
| Maruti Suzuki WagonR | 1.0L / 1.2L | Hatchback | 5.5 – 7.4 lakh |
| Maruti Suzuki Swift | 1.2L | Hatchback | 6 – 9 lakh |
| Hyundai Grand i10 NIOS | 1.2L | Hatchback | 5.8 – 8.2 lakh |
| Tata Tiago | 1.2L | Hatchback | 5.5 – 7.9 lakh |
| Citroën C3 | 1.2L Turbo | Hatchback | 6 – 8.5 lakh |
| Hyundai Exter | 1.2L | Compact SUV | 6.3 – 10 lakh |
| Nissan Magnite | 1.0L Turbo | Compact SUV | 6 – 10.5 lakh |
| Renault Kiger | 1.0L Turbo | Compact SUV | 6.1 – 10.5 lakh |
| Honda Amaze | 1.2L | Sedan | 7 – 9.5 lakh |
| Hyundai Aura | 1.2L | Sedan | 6.5 – 9 lakh |
| Maruti Suzuki Dzire | 1.2L | Sedan | 6.8 – 9.5 lakh |
Note: Prices are approximate ex-showroom (Delhi, 2025). Dealer/location-specific differences apply.
Why it's a WOW for Indian customers
- Immediate affordability: Lower GST directly reduces ex-showroom prices — more buyers can now move from two-wheelers or used cars to new small cars.
- Boost for EV adoption: Reduced GST on EVs makes the switch to electric more financially attractive.
- Cheaper financing: Smaller loan amounts reduce EMIs and loan tenure.
- Support for Make-in-India: Higher demand benefits domestic manufacturers and suppliers.
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