GST 2.0: Here's what you'll now pay for SUVs over 4 metres…

The new Goods and Services Tax (GST) regime, announced by Prime Minister Narendra Modi last month, has officially come into force. Nicknamed ‘GST 2.0,’ it reshapes automobile taxation in India by moving to a simpler two-slab structure of 5 per cent and 18 per cent, with a special 40 per cent slab for luxury goods. The big headline for car buyers is that the compensation cess, which earlier sat on top of GST, has been scrapped.

For small cars and two-wheelers, this means lower costs. But for mid-size and larger cars, especially those longer than four metres with petrol engines above 1,200cc or diesel engines over 1,500cc, the impact is mixed. These models are now taxed at a flat 40 per cent.

How old vs new system compares

Earlier, all passenger cars attracted a 28 per cent GST, plus a cess ranging from 1 per cent to 22 per cent depending on engine size and body style. This pushed up effective tax rates on larger cars to 45 per cent to 50 per cent.

Under GST 2.0, the cess is gone. Instead, these cars now fall into the 40 per cent luxury slab. So while the headline GST rate looks higher, the overall incidence for most mid-size and large cars is actually lower than before.

• Petrol cars between 1,200cc and 1,500cc: down from ~45 per cent to 40 per cent.
• Diesel cars above 1,500cc: down from ~48 per cent to 40 per cent.

That means, in real terms, these bigger vehicles should see slight relief in their on-road prices.

What will the on-road pricing for cars over 4 metres look like?

Here’s a look at some of the popular models over 4 metres in length and how their on-road prices are expected to shift after the new GST rules:

• Hyundai Creta: Old price: ₹11.11 lakh – ₹20.92 lakh
  New price: ₹10.73 lakh – ₹20.20 lakh
• Kia Seltos: Old price: ₹11.19 lakh – ₹20.56 lakh
  New price: ₹10.80 lakh – ₹19.85 lakh
• Honda Elevate: Old price: ₹11.91 lakh – ₹16.73 lakh
  New price: ₹11.50 lakh – ₹16.15 lakh
• Maruti Grand Vitara: Old price: ₹11.42 lakh – ₹20.68 lakh
  New price: ₹11.03 lakh – ₹19.97 lakh
• Mahindra Scorpio N: Old price: ₹13.99 lakh – ₹25.62 lakh
  New price: ₹13.51 lakh – ₹24.74 lakh
• Tata Safari: Old price: ₹15.50 lakh – ₹27.44 lakh
  New price: ₹14.97 lakh – ₹26.49 lakh
• Tata Harrier: Old price: ₹15.00 lakh – ₹26.69 lakh
  New price: ₹14.48 lakh – ₹25.77 lakh
• Mahindra XUV700: Old price: ₹14.49 lakh – ₹25.14 lakh
  New price: ₹13.99 lakh – ₹24.27 lakh
• Toyota Innova Crysta: Old price: ₹19.99 lakh – ₹27.08 lakh
  New price: ₹19.30 lakh – ₹26.15 lakh
• Toyota Fortuner: Old price: ₹36.05 lakh – ₹44.72 lakh
  New price: ₹34.81 lakh – ₹43.18 lakh
• Volkswagen Virtus: Old price: ₹10.56 lakh – ₹19.40 lakh
  New price: ₹10.20 lakh – ₹18.73 lakh
• Honda City: Old price: ₹12.38 lakh – ₹16.65 lakh
  New price: ₹11.95 lakh – ₹16.08 lakh
• Hyundai Verna: Old price: ₹11.07 lakh – ₹17.58 lakh
  New price: ₹10.69 lakh – ₹16.97 lakh

All prices mentioned above are estimated ex-showroom, Delhi.

What does it mean for you?

The GST 2.0 regime is a double-edged sword. Small cars get a big boost from the 18 per cent slab, which could revive entry-level sales. Larger cars, SUVs, and MPVs are now officially slotted as ‘luxury goods’ under the 40 per cent slab, but since the cess is gone, they’re actually slightly more affordable than before.

For consumers planning to buy cars like the Creta, Harrier, or Fortuner, this means better value during the ongoing festive season. However, luxury EVs such as Tesla and BYD, which also fall under the 40 per cent bracket, could feel pressure, potentially slowing their growth in India.

Check out Upcoming Cars in India 2026, Best SUVs in India.