Small Cars, Big Savings: GST Cut Makes Maruti Models More Affordable for Indian Buyers
In a major relief for the Indian middle class, the Government of India has reduced the Goods and Services Tax (GST) on small cars from 28% to 18%. This decision, taken by the GST Council, will significantly lower the cost of ownership for some of the country’s most popular models such as the Maruti Swift, WagonR, Baleno, and Fronx.
The new GST rate will come into effect from September 22, 2025, just in time for Navratri, one of the busiest car-buying seasons in India.
Who Benefits from the GST Cut?
The revised GST rate applies to:
- Petrol and petrol-hybrid cars
- CNG and LPG vehicles
Conditions:
- The car must have an engine capacity of 1200cc or less
- The car must be no longer than 4 meters
In the case of diesel or diesel-hybrid cars, the GST cut to 18% is only applicable if:
- The engine capacity is 1500cc or less
- The car’s length is within 4 meters
These new regulations aim to make affordable, fuel-efficient cars more accessible for middle-income buyers.
Maruti Suzuki: The Biggest Gainer
Maruti Suzuki, India’s leading carmaker, is set to benefit the most from this tax reduction. The company has a strong portfolio of compact cars that qualify under the new GST regime, including:
- Alto K10
- S-Presso
- Celerio
- Eeco
- WagonR
- Ignis
- Swift
- Baleno
- Dzire
- Fronx
Buyers of these cars can now expect savings ranging from ₹42,000 to ₹76,000 depending on the model.
Model-Wise GST Savings on Maruti Cars
Here is a detailed look at how much customers can save after the GST cut:
| Model | Old Ex-Showroom Price | 29% Tax (Old) | 19% Tax (New) | You Save |
|---|---|---|---|---|
| Alto K10 | ₹4,23,000 | ₹1,22,669 | ₹80,370 | ₹42,299 |
| S-Presso | ₹4,26,500 | ₹1,23,684 | ₹81,035 | ₹42,649 |
| Celerio | ₹5,64,000 | ₹1,63,560 | ₹1,07,160 | ₹56,400 |
| Eeco | ₹5,69,500 | ₹1,65,155 | ₹1,08,205 | ₹56,950 |
| WagonR | ₹5,78,500 | ₹1,67,765 | ₹1,09,915 | ₹57,850 |
| Ignis | ₹5,85,000 | ₹1,69,650 | ₹1,11,150 | ₹58,500 |
| Swift | ₹6,49,000 | ₹1,88,210 | ₹1,23,310 | ₹64,900 |
| Baleno | ₹6,74,000 | ₹1,95,460 | ₹1,28,060 | ₹67,400 |
| Dzire | ₹6,83,999 | ₹1,98,359 | ₹1,29,959 | ₹68,400 |
| Fronx | ₹7,58,500 | ₹2,19,964 | ₹1,44,115 | ₹75,849 |
Note: The GST cut applies only to the petrol/CNG variants under 1200cc and within 4 meters in length. Higher engine options (like 1500cc) will still attract the old 28% GST rate.
Why This Matters to Consumers
The tax cut comes as a timely incentive for buyers planning to upgrade their vehicles during the festive season. With savings close to ₹70,000 on models like the Baleno and Dzire, this policy shift is expected to drive strong sales across the small car segment.
Not only does this make new cars more accessible, but it also strengthens the government’s push toward energy-efficient, low-emission vehicles that are ideal for urban and semi-urban commuting.
The reduction of GST from 28% to 18% on small cars is a significant move by the Indian government to ease the financial burden on middle-class families and promote eco-friendly vehicle adoption. With festive demand picking up and prices falling, now may be the perfect time for consumers to invest in a new car.
