GST 2.0: Which Mahindra, Honda, Toyota Cars — and Which Bikes — Will Get Cheaper
The GST Council’s September 2025 reform—commonly called GST 2.0—restructured tax slabs for vehicles, cutting the GST on small cars and two-wheelers ≤ 350cc from 28% to 18%, effective 22 September 2025. Manufacturers have begun passing the savings to buyers: Mahindra, Tata, Toyota, Kia, Hyundai, Maruti Suzuki and others announced price cuts (savings range from ~₹40,000 on small hatchbacks to several lakhs on SUVs and luxury cars). On two-wheelers, popular scooters and motorcycles such as the Honda Activa, Hero Splendor, and many Royal Enfield models under 350cc have become noticeably cheaper. The GST Council’s official press note and subsequent finance-ministry notifications formalised the change.
On 3 September 2025, the 56th meeting of the GST Council approved a major tax rejig: many goods previously taxed at 28% would move to 18% (or 5% for certain essentials), and a new 40% “demonetisation/ sin” slab was created for selected items. Critically for motorists, small petrol/LPG/CNG cars (up to 1,200 cc petrol / up to 1,500 cc diesel and under 4,000 mm in length) and two-wheelers up to 350cc were moved into the 18% slab — a direct, structural cut from the previous 28% rate. The reforms were implemented from 22 September 2025 after finance-ministry notifications.
- Small cars: GST reduced from 28% to 18% for petrol/LPG/CNG cars up to 1200 cc and diesel up to 1500 cc, and length ≤ 4000 mm.
- Two-wheelers: Bikes and scooters up to 350cc moved from 28% to 18%; high-capacity motorcycles above 350cc face a different (higher) tax treatment in the new structure.
- Implementation date: 22 September 2025 — manufacturers could implement new prices from this date after the formal notifications.
Mahindra — up to ~₹1.56 lakh off
Notable reductions include: Bolero Neo (~₹1.27 lakh off), XUV 3XO (petrol ~₹1.40L, diesel ~₹1.56L), Thar range (up to ~₹1.35L), Scorpio Classic (~₹1.01L), Scorpio N (~₹1.45L), XUV700 (~₹1.43L). These are significant for buyers considering mid-size SUVs.
Tata Motors — up to ~₹1.55 lakh off
Examples: Tiago (~₹75,000 off), Tigor (~₹80,000), Altroz (~₹1.10L), Nexon (~₹1.55L), Harrier (~₹1.40L), Safari (~₹1.45L). Tata’s price cuts strengthen their compact-SUV and hatchback plays.
Toyota — up to ~₹3.49 lakh off
Higher-end cuts include Fortuner (~₹3.49L), Legender (~₹3.34L), Hilux (~₹2.52L), Vellfire (~₹2.78L). Toyota’s strategy shows the GST benefit spills into larger segments via tax-structure tweaks and removal of other levies in certain cases
Kia, Hyundai, Maruti, Renault, Skoda, Nissan, Range Rover
- Kia: up to ~₹4.48L (Carnival), Sonet and Seltos also see notable cuts.
- Hyundai: Grand i10 Nios, i20, Venue and Tucson see tens of thousands to lakhs shaved off.
- Maruti Suzuki: range of small cars (Alto, WagonR, Swift, Brezza, Jimny) see reductions (~₹40k to ~₹1.14L), boosting their mass-market appeal.
- Renault, Nissan, Skoda: similar model-wise cuts announced. Luxury brands (Range Rover) reported very large absolute rupee cuts because base prices are much higher.
Bikes & scooters: who wins (and who loses)?
This is arguably the biggest headline for everyday Indians: nearly 98% of India’s two-wheeler market is scooters and motorcycles ≤ 350cc, which now attract 18% GST instead of 28% — a sizable cut for the mass market. NDTV and several auto portals broke the bike winner list down model-by-model (examples below).
Honda (two-wheelers) — up to ~₹18,887 off on certain models
Popular scooters and commuter bikes got real-world cuts: Activa variants (₹7k–₹8k off depending on engine), Dio, Shine, CB125, SP125, and even mid-spec bikes like Hornet 2.0 and CB350 family showing larger rupee benefits for CB350 variants (~₹18.6–18.8k) as published by NDTV. www.ndtv.com
Royal Enfield — most core models benefit
Royal Enfield’s mainstream lineup (Hunter 350, Classic 350, Meteor 350, Bullet etc.) fall under the ≤350cc cut and will be significantly cheaper; ET and TOI estimated large percentage drops for core RE models because they make up a majority of RE sales. Larger RE models or special editions above 350cc may face different tax outcomes.
TVS, Bajaj, Hero, Yamaha
Manufacturers with strong commuter/scooter portfolios (TVS Ronin, Bajaj Pulsar ranges, Hero Splendor) will pass on savings: BikeDekho and Business Standard estimated per-model reductions running into thousands and occasionally tens of thousands (depending on model).
Watch-out: bikes above 350cc in many cases attract higher taxes in the new structure (a 40% slab was mooted for some high-end bikes), so the luxury-bike segment could become costlier — a deliberate policy to tax “sin/luxury” goods more.
How big are the savings — ballpark examples
Numbers matter, so here are a few concrete examples taken from the NDTV compilation and other publisher lists:
- Mahindra Thar: up to ~₹1.35 lakh reduction depending on variant.
- Tata Nexon: around ~₹1.55 lakh off — a big markdown in the compact-SUV category.
- Toyota Fortuner: ~₹3.49 lakh off — large absolute rupee impact on premium SUVs.
- Honda Activa 110: ~₹7,874 cheaper (example of mass-market scooter saving).
- Royal Enfield Meteor 350: manufacturers and media reported 8%+ price drops on core 350cc offerings.
FAQs
Q1: When did the GST changes for vehicles take effect, and who decided them?
A1: The GST Council (56th meeting) approved the vehicle tax changes on 3 September 2025, and the revised rates (moving many vehicle categories to 18%) were implemented from 22 September 2025 after finance-ministry notifications. The Council’s press release and PIB notifications detail the measures.
Q2: Which vehicles specifically got cheaper? Can you name a few popular models?
A2: Yes — examples include Mahindra Thar (up to ~₹1.35 lakh off), Tata Nexon (~₹1.55 lakh off), Toyota Fortuner (~₹3.49 lakh off). Two-wheelers like Honda Activa, Hero Splendor, Royal Enfield Classic 350, TVS Ronin also saw notable reductions (specific rupee savings vary by variant). Refer to brand lists published by NDTV and other outlets for a full model-wise breakdown.
Q3: Will luxury cars also get cheaper under GST 2.0?
A3: Some luxury cars do show large absolute rupee reductions (because of high base prices), but the GST Council also introduced nuanced taxation for “high-end” items (including a 40% slab for certain goods). Luxury-segment pricing will depend on model classification and any ancillary cess adjustments; Range Rover and some luxury brands reported significant rupee cuts in initial lists. Always check model classification and OEM announcements.
Q4: Does the GST cut mean lower registration (RTO) fees and cheaper insurance?
A4: Not directly. GST affects the ex-showroom price (tax on supply). RTO registration fees, road tax and insurance premiums are still calculated on the taxable value and might fall slightly if the ex-showroom price drops — but state road taxes vary by state and sometimes depend on vehicle value brackets, so the final on-road savings can differ across states. Confirm on-road price at your dealer.
Q5: Are there vehicles that became more expensive after GST 2.0?
A5: Potentially yes — high-capacity motorcycles (above 350cc) and certain luxury items may face different treatment or higher effective taxation under the new structure (40% slab for some categories). So while most mass-market cars and bikes got cheaper, premium and “sin/luxury” categories might not benefit. Check model-specific tax classification.
