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GST Rate Cut on Cars: These Popular Models Will Get Cheaper from Sept 22
Starting September 22, 2025, the GST on small cars and motorcycles up to 350cc will decrease from 28% to 18%. This change aims to enhance affordability for popular models, while larger vehicles will continue to face a 40% tax. The revised tax applies to small petrol cars with engines up to 1200cc and diesel cars up to 1500cc. Notable models benefiting from this reduction include the Maruti Suzuki Swift and Hyundai Grand i10 Nios, among others, while larger vehicles will retain the higher GST rate.
Keshav Rajput
Updated Sep 15, 2025, 12:27 PM IST
GST Rate Cut on Cars: These Popular Models Will Get Cheaper from Sept 22
From September 22, 2025, the GST Council will reduce tax on small cars and motorcycles up to 350cc to 18%, down from 28%. This move is expected to make several popular cars more affordable, while larger vehicles remain at 40% GST.
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The GST Council’s new tax structure targets small cars with petrol engines up to 1200cc, diesel engines up to 1500cc and length not exceeding 4000mm. These cars will now attract 18% GST, compared to 28% previously.
For example, the Maruti Suzuki Swift, priced around Rs 6.49 lakh ex-showroom, will now include 18% GST instead of 28%, lowering the tax component by roughly Rs 65,000. The Hyundai Grand i10 Nios, another hatchback under 1200cc, will also see a similar reduction. Compact SUVs like the Tata Punch and Honda Amaze will similarly benefit from the reduced GST rate.
Petrol, CNG and Diesel Options
Petrol models
- Maruti Suzuki Swift
- Hyundai Grand i10 Nios
- Tata Punch
- Honda Amaze
CNG models
- Maruti Suzuki WagonR CNG
- Maruti Suzuki Baleno CNG
- Maruti Suzuki Dzire CNG
- Tata Tiago CNG
- Tata Punch CNG
Diesel models
- Tata Nexon
- Kia Sonet
(Note: All these vehicles meet the engine and size criteria to qualify for the lower tax rate.)
Vehicles Remaining at Higher GST Slabs
- Mid-size and large cars, racing cars and station wagons remain at 40%.
- Motorcycles above 350cc also remain in the 40% category.
Ex-Showroom Price Comparison Before and After GST Cut
| Car Model | Ex-Showroom Price | Current GST28% | New GST 18% | Difference |
| Maruti Suzuki Swift | Rs 6,49,000 | Rs 1,81,720 | Rs 1,16,820 | Rs 64,900 |
| Tata Nexon | Rs 8,00,000 | Rs 2,24,000 | Rs 1,44,000 | Rs 80,000 |
| Tata Punch | Rs 6,00,000 | Rs 1,68,000 | Rs 1,08,000 | Rs 60,000 |
| Honda Amaze | Rs 8,10,000 | Rs 2,26,800 | Rs 1,45,800 | Rs 81,000 |
| Maruti Suzuki Wagon R | Rs 5,78,000 | Rs 1,61,840 | Rs 1,04,040 | Rs 57,800 |
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