GST increased on big cars in India, but the price was low, how did it happen? Know

GST increased on big cars in India, but the price was low, how did it happen? Know

by with No Comment Car Review

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The GST rate on large cars and SUVs in India has been increased from 28% to 40%, but the prices of vehicles like Mahindra XUV700, Toyota Fortuner, and Mercedes-Benz GLS have come down by 8-10%. How has this happened? Know …

GST increased on big cars in India, but the price was low, how did it happen?
New Delhi. Large cars and SUVs in India have always been a status symbol. It was not easy to buy them, because the tax burden on them was more than common cars. But the government has made a big change in the GST (GST) structure in September 2025. According to this change, GST on cars with less than 1200 cc and less than 4000mm is now only 18 percent, while it was 28 percent earlier. Due to this, GST has been increased from 28 percent to 40 percent on large capacity and size cars. Despite increasing GST rates on big cars, their prices have come down? Why?

Actually, the government has increased the rates of GST, but the cess that used to be first, has been removed. Due to this, the total tax has been reduced, car companies have also reduced the prices of cars, so that the benefits of tax deduction can reach the common people. This can be understood by some examples.

Till now, the country had double tax on SUVs or luxury cars with engine capacity larger than 4 meters and more than 1500cc capacity. First 28% GST was felt. Compassion cess ranging from 17% to 22% was imposed on it. That is, in this way the total tax burden used to reach 45% to 50%, due to which the ex-showroom prices of these cars increased millions of rupees.

What has the government changed?

After the GST 2.0 implemented in September 2025, the government has made a big change. Now 40% flat GST will be imposed directly on big cars, SUVs and premium sedans. The concentration cess of 17 to 22% has been completely removed. The real reason for the decrease in the price of cars is the tobity of 'Compassion Cess'. Now the total tax has decreased by 10%. So this means that the tax which used to be up to 50 percent earlier, is now reduced to 40.

Authorimg

Malkhan Singh

Malkhan Singh has been in the world of news and content for the last 17 years. In the journey from print media to digital media, the name of many well -known institutions is connected in profiles. Working with News18Hindi for almost 4 years …Read more

Malkhan Singh has been in the world of news and content for the last 17 years. In the journey from print media to digital media, the name of many well -known institutions is connected in profiles. Working with News18Hindi for almost 4 years … Read more

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Location:

New Delhi,New Delhi,Delhi

First Published:

September 10, 2025, 14:05 IST

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GST increased on big cars in India, but the price was low, how did it happen?

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