Why GST Reduction 2025 Matters for Vehicle Buyers
The prices of cars in India are going to decrease — not just a little, but a lot. If you are planning to buy an expensive car, you stand to gain even more benefits. Cars, bikes, scooters, three-wheelers, tractors, and even car servicing costs are expected to become cheaper due to GST changes.
However, there is one exception: motorcycles above 350cc will see a price hike. In this article, we bring you complete details of the GST reduction and its impact on different vehicle categories in India.
👉 For official GST rate notifications, visit the CBIC GST Portal: https://cbic-gst.gov.in
📊 GST Reduction Rates Before vs After (Cars & Bikes)
| Vehicle Category | Previous GST Rate | New GST Rate | Savings/Impact |
| Sub 4-Metre Cars (Petrol <1.2L / Diesel <1.5L) | 29–31% | 18% | Save ₹1–1.5 lakh |
| Mid-Size SUVs & Sedans (>4m or larger engines) | 43–50% | 40% | Save ₹2–6 lakh depending on model |
| Luxury SUVs & Premium Cars (Mercedes, BMW, Audi, etc.) | 48–50% | 40% | Big price cut, ₹5–10 lakh+ |
| Bikes ≤ 350cc (Splendor, Pulsar, RE Classic, Activa) | 28% | 18% | Prices drop significantly |
| Bikes > 350cc (Ninja, RE 650 twins, Superbikes) | 31% | 40% | Price increase, costlier |
| Three-Wheelers, Trucks, Buses | 28% | 18% | Prices drop |
| Car Spare Parts & Servicing | 18–28% (varies) | 18% flat | Lower maintenance costs |
🚘 Sub 4-Metre Cars: Maximum Savings for Budget Buyers
Cars that are under 4 metres in length and have petrol engines below 1.2L or diesel engines below 1.5L now enjoy a reduced GST of 18%, down from 29–31%.
Popular models in this category include:
– Maruti Alto, Celerio, WagonR, Swift, Baleno, Dzire
– Tata Punch, Nexon
– Hyundai i10, i20, Venue
– Kia Sonet
– Honda Amaze
– Citroen C3
👉 If you were planning to buy a car priced between ₹10–15 lakh, you could save up to ₹1–1.5 lakh thanks to this tax cut.
👉 Compare latest car prices on CarDekho: https://www.cardekho.com
🏆 Mid-Size SUVs and Sedans: Big Discounts on Popular Models
For vehicles above 4 metres or with larger engines, the GST rate has been reduced from 43–50% to 40%.
Cars in this category include:
– Hyundai Creta, Kia Seltos
– Skoda Kushaq, Volkswagen Taigun
– Toyota Hyryder, Maruti Grand Vitara
– Toyota Fortuner, Tata Safari, Mahindra XUV700
– Premium brands: Mercedes-Benz, BMW, Audi
👉 Read expert SUV reviews on Autocar India: https://www.autocarindia.com
🚙 Top Car Models & Approximate Savings After GST Cut
Toyota Fortuner GR Sport: Save ₹5–6 lakh
Mahindra XUV700 : Save ₹2 lakh
Tata Safari: Save ₹2–3 lakh
Hyundai Creta / Kia Seltos: Save ₹80k–1.5 lakh
Maruti Baleno / Swift / Dzire: Save ₹80k–1.2 lakh
Tata Punch / Nexon: Save ₹1–1.5 lakh
👉 See detailed Fortuner vs XUV700 comparison on ZigWheels
🏍️ Two-Wheelers: Good News for Small Bikes, Bad News for Superbikes
✅ Cheaper Bikes (≤ 350cc): Splendor, Activa, Pulsar, Apache, Royal Enfield Classic/Bullet (GST reduced from 28% to 18%)
❌ Costlier Bikes (> 350cc): Kawasaki Ninja, superbikes, Royal Enfield 650 twins (GST increased from 31% to 40%)
👉 Check updated bike prices on BikeWale
🛺 Three-Wheelers, Trucks, Buses, and Spare Parts
Three-wheelers, trucks, and buses now attract a flat 18% GST.
Car servicing and spare parts also see uniform pricing, as GST is now 18% flat instead of varying between 18–28%.
⛽ What About Petrol and Diesel?
Petrol and diesel are still not under GST. They continue to attract VAT, keeping prices high.
If petrol were brought under GST, its price could reduce by ₹40–50 per litre.
🌱 E20 Fuel and Taxation Concerns
E20 fuel taxation remains high. Indians pay ₹40–50 per litre as tax on petrol. Including petrol under GST could make E20 far more affordable.
📉 Final Thoughts: A Great Time to Buy Vehicles in India
With GST reforms lowering the prices of most vehicles, 2025 is shaping up to be one of the best years to buy a car or bike in India.
– Budget hatchbacks under 4 metres → big savings
– SUVs & luxury cars → lakhs cheaper
– Bikes under 350cc → more affordable
– Spare parts & servicing → cheaper maintenance
The only losers are buyers of bikes above 350cc, but overall, the Indian automobile market has become much more affordable.
❓ Frequently Asked Questions (FAQ) on GST Reduction 2025 in India
- Q: Which cars got cheaper after the GST reduction 2025?
A: Sub 4-metre cars like Maruti Swift, Baleno, Dzire, Tata Nexon, Punch, Hyundai i20, and Kia Sonet became cheaper as GST dropped from 31% to 18%. Bigger SUVs like Toyota Fortuner, Mahindra XUV700, and Tata Safari also got cheaper with GST reduced to 40%.
- Q: Which bikes are cheaper now?
A: All motorcycles and scooters with engines up to 350cc, such as Splendor, Pulsar, Apache, Activa, and Royal Enfield Classic/Bullet, are now cheaper as GST fell from 28% to 18%.
- Q: Which bikes got more expensive after GST changes?
A: Superbikes and motorcycles above 350cc, such as Kawasaki Ninja and Royal Enfield 650 twins, saw GST rise from 31% to 40%, making them more expensive.
- Q: How much can I save on SUVs like the Toyota Fortuner or XUV700?
A: Toyota Fortuner GR Sport: ₹5–6 lakh cheaper
Mahindra XUV700: ₹2 lakh cheaper
Tata Safari: ₹2–3 lakh cheaper
- Q: Is petrol included in GST now?
A: No, petrol and diesel are still outside GST. They are taxed under VAT. If brought under GST, petrol could become cheaper by ₹40–50 per litre.
- Q: Does the GST reduction 2025 affect car servicing costs?
A: Yes ✅. Earlier, spare parts had different GST rates (18–28%). Now it’s a flat 18%, reducing servicing costs for all vehicles.
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