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Mumbai: Auto major Mahindra & Mahindra (M&M) on Saturday announced a reduction in prices across its entire ICE SUV portfolio, passing on the full benefits of the GST 2.0 rationalisation to customers. The announcement comes a day after Tata Motors and follows similar moves from global carmakers such as BMW and Renault, signaling a broad industry trend of price corrections post-GST reforms.
The decision is a direct fallout of the 56th GST Council meeting held on September 3, 2025, chaired by Finance Minister Nirmala Sitharaman, which slashed the earlier four-slab structure into two primary slabs of 5% and 18%, with a separate 40% slab for sin and luxury goods, including high-end vehicles. The new system will be implemented from September 22, 2025, but Mahindra has pre-emptively announced reductions starting September 6.
GST Reforms & Auto Industry Impact
The new GST framework marks one of the most significant indirect tax reforms in recent years for the automobile sector.
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Small cars, hatchbacks, and mini SUVs will now fall under the 18% slab, compared to the earlier 28% plus cess.
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Luxury cars and SUVs will attract 40% GST, but importantly, the cess component has been removed. This means that while the headline rate rises from 28% to 40%, the effective tax burden will fall from nearly 50% to 40%, leading to lower sticker prices for premium vehicles.
This rationalisation is expected to make vehicles more affordable, especially in the mass-market category, and provide a boost to volumes during the upcoming festive season.
Mahindra Leads the Charge
Announcing the move, Mahindra said:
“We are delighted to pass on the full GST benefits to our customers across our ICE SUV portfolio. This reflects our commitment to delivering value to customers and aligning with the government’s vision of simplifying the tax regime.”
The announcement comes at a time when the company is seeking to expand its market share in the highly competitive SUV segment. In August 2025, Mahindra reported total auto sales of 75,901 units, slightly below the CNBC-TV18 poll estimate of 79,167 units.
Industry-Wide Trend
Mahindra’s move comes right after Tata Motors announced on September 5 that it would also pass on the GST benefits across its cars and SUVs from September 22.
Meanwhile, BMW revealed price cuts across its premium portfolio, with the X7 SUV becoming cheaper by nearly ₹9 lakh. Renault India too has announced reductions of up to ₹95,000 on select models.
Industry insiders suggest that Maruti Suzuki, India’s largest carmaker, is also expected to follow suit with similar price cuts in the coming days.
With multiple players joining the price-reduction bandwagon, customers are expected to gain significantly across segments—from entry-level hatchbacks to luxury SUVs.
Consumer Advantage & Market Outlook
The GST cuts are likely to reignite demand in India’s auto market, which has seen fluctuating sales amid rising input costs and global supply chain pressures. With car prices set to become more affordable, especially in the mass-market categories, analysts expect:
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Higher sales volumes during the festive season.
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Improved penetration in semi-urban and rural markets.
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Price-sensitive customers to return to the market, particularly in the small car and compact SUV segments.
Luxury and premium automakers are also expected to benefit from a reduction in the effective tax burden, making imported and high-end cars relatively more accessible.
Conclusion
With GST 2.0 ushering in a simpler two-slab structure, the auto industry is witnessing an immediate ripple effect in the form of price cuts. Mahindra & Mahindra’s announcement, closely following Tata Motors, BMW, and Renault, signals the beginning of a competitive cycle that could benefit customers across all price brackets.
As the country’s largest carmaker Maruti Suzuki prepares to announce its strategy, the industry is poised for a price-driven sales surge that could reshape the auto market in the second half of FY26.
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