- GST Council approved limiting slabs to 5% and 18% from September 22, Navaratri start
- Small petrol, LPG, CNG cars under 1200 cc and diesel cars under 1500 cc move to 18% GST
- Motorcycles up to 350 cc now taxed at 18% instead of 28% GST
The GST Council on Wednesday approved limiting slabs to 5% and 18% effective from September 22, the first day of Navaratri. As part of the reforms, petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length as well as diesel vehicles of up to 1,500 cc and 4,000 mm length would move to the 18% GST rate.
Earlier, these two categories attracted 28% GST with compensation cess of 1%, and 28% GST with 3% compensation cess, respectively. Motorcycles up to 350 cc would be taxed at a lower GST of 18% against 28% earlier.
All automobiles above 1,200 cc and longer than 4,000 mm as well as motorcycles above 350 cc and racing cars will be charged with a 40%. Small hybrid cars will also benefit, while EVs will continue to be charged at 5%.
Which Cars Will Be Cheaper?
GST rate on three-wheelers
The GST rate on all small cars has been reduced from 28% to 18%. For the purposes of GST, small cars means Petrol, LPG, or CNG cars with an engine capacity up to 1200 cc and length up to 4000 mm and Diesel cars with engine capacity up to 1500 cc and length up to 4000 mm.
Hatchbacks:
Maruti Suzuki Swift
Maruti Suzuki Baleno
Maruti Suzuki Wagon R
Maruti Suzuki Ignis
Hyundai Grand i10 Nios
Hyundai i20
Tata Tiago
Tata Altroz
Renault Kwid
Citroen C3
Compact Sedans (Sub-4m):
Maruti Suzuki Dzire
Hyundai Aura
Tata Tigor
Compact SUVs (Sub-4m):
Maruti Suzuki Fronx
Tata Nexon (Petrol variants)
Hyundai Venue
Kia Sonet (Petrol variants)
Mahindra XUV 3XO (Petrol variants)
Tata Punch
Hyundai Exter
September 3, 2025Which Cars Will Be Expensive?
The GST rate on all mid-size and large cars i.e vehicles exceeding 1500 cc or length exceeding 4000mm is 40%. Further, motor vehicles in the category of Utility Vehicles, called including Sports Utility Vehicles (SUV), Multi Utility Vehicles (MUV), Multi-purpose Vehicles (MPV) or Cross-Over Utility Vehicles (XUV), with an engine capacity exceeding 1500 cc, length exceeding 4000 mm, and ground clearance of 170 mm and above, will also attract a GST rate of 40% without any cess.
Here's a list of such cars whose key determinant is meeting at least one of the two criteria: engine capacity over 1500 cc or a length over 4000 mm.
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Mahindra Scorpio
Mahindra XUV700
Mahindra Thar
Hyundai Creta
Kia Seltos
Tata Harrier
Tata Safari
Maruti Suzuki Grand Vitara
Toyota Fortuner
Toyota Innova Crysta
Skoda Superb
All high-end luxury SUVs from brands like:
Audi
BMW
Mercedes-Benz
Land Rover
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