Tata Motors on Friday announced that it will pass on the full benefit of the recent GST reduction on its cars and SUVs to customers, effective September 22, the date the revised GST rates come into effect. With this, prices of Tata Motors’ most affordable model Tiago will get cheaper by up to Rs 75,000 and prices of sub-4 metre SUV Nexon will see the maximum reduction of up to Rs 155,000.
“The reduction in GST on passenger vehicles, effective 22nd September 2025, is a progressive and timely decision that will make personal mobility more accessible for millions across India. In line with the Hon’ble Prime Minister’s vision, the Hon’ble Finance Minister’s intent and our Customer First philosophy, Tata Motors will fully honor the intent and spirit of this reform by passing on the entire benefit of the reduction in GST to our customers,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility.
He added, “This will make our popular range of cars and SUVs even more accessible across segments, enabling first-time buyers and accelerating the shift towards new age mobility for a wider spectrum of customers.”
Tata Motors is the first automaker to announce passing the benefit of GST reduction to consumers. It has put pressure on other carmakers to follow suit even as they were looking to retain some benefits to improve their margins.
Industry sources highlighted that the reduction in prices following the GST cut will now allow original equipment manufacturers (OEMs) and dealer showrooms to cut down on various lucrative offers and discounts they have been giving for over a year to boost sales amid stagnation in demand.
Among other top-selling Tata Motors models, Altroz will see a price reduction of up to Rs 110,000, Punch will see a reduction of up to Rs 85,000, Harrier will see a reduction of up to Rs 140,000 and Safari will see a reduction of up to Rs 145,000.
The Goods and Services Tax (GST) Council on Wednesday reduced levies on small cars and mass-market motorcycles (engine size below 350cc) from 28% to 18%. However, premium cars, including sports utility vehicles (SUVs), will now attract a 40% GST. The Council made no changes to the GST rate for electric vehicles (EVs) across segments.
At present, passenger vehicles fall under the 28% tax slab and a cess. Small cars are taxed at 28%, while large cars (above 4 metres in length and 1200CC engine capacity) face a combined rate (GST plus cess) of 43-50%. Under the new regime, large cars will be taxed at a flat 40% with no cess.
Since the announcement of GST reforms last month, buyers have been delaying purchases in anticipation that prices may decline up to 8-10%. This has severely impacted the sales of automobiles since mid-August.
Tata Motors said that with demand for deliveries expected to surge during the festive season, they are encouraging customers to book their preferred vehicle early for delivery.