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3d ago

Automakers Cut Prices as GST 2.0 Nears, With Luxury Cars Cheaper Under 40% Slab

Officials vow to police pass‑through of tax cuts as brokerages forecast a consumption boost to corporate revenues in FY26.

Skoda GST Benefits and Offers
A study of past GST dispute found that the majority of disputes on classification and rate were in the food sector and automobile parts. (REUTERS)
Image
A Kia India showroom in Mumbai.

Overview

  • Hyundai, Tata Motors and Mahindra & Mahindra announced ex‑showroom reductions effective Sept. 22, with cuts up to Rs 2.40 lakh, Rs 1.55 lakh and Rs 1.56 lakh respectively across key models.
  • Audi and BMW joined in with price drops of roughly Rs 2.6–7.8 lakh and up to Rs 9 lakh, reflecting the shift of larger vehicles to a 40% GST band from an earlier effective ~50%.
  • Under GST 2.0, small cars and motorcycles up to 350cc move to 18% GST from 28%, while high‑end vehicles sit at 40%; the new structure takes effect on Sept. 22.
  • Motorcycles above 350cc will get costlier under the 40% slab, and Royal Enfield and Bajaj Auto have urged the GST Council to adopt a uniform rate for two‑wheelers.
  • CBIC said it will probe complaints of firms not passing on benefits; dealers reported August demand paused ahead of the change, used‑car prices are expected to ease, and analysts now peg FY26 topline growth at about 6–7%.