New GST Rates for Luxury Cars: How Mercedes & BMW Prices Have Changed

The new GST rates for cars, effective September 22, 2025, have shaken up the Indian luxury car market. While mainstream models see minimal adjustments, the spotlight is firmly on luxury cars and SUVs. With GST 2.0 reforms, premium vehicles such as the Mercedes-AMG G 63, Maybach GLS 600, and BMW X7 are now significantly more affordable, with customer benefits ranging from ₹1.6 lakh to over ₹25 lakh in some cases.

This article deep-dives into how GST reduction on cars is reshaping the segment, what it means for luxury buyers in India, and which models have become the best value propositions post the tax revision.

Understanding GST 2.0 and its Impact on Luxury Vehicles

Before the reform, luxury cars in India were subjected to a 28% GST plus a high compensation cess, which could be as much as 22% for large SUVs. This combination resulted in an effective tax rate of up to 50% of the ex-showroom price, making these vehicles prohibitively expensive.

The new GST structure simplifies this. Luxury cars and other vehicles with engine capacity over 1500cc or length exceeding 4000mm, now fall under a new, flat 40% GST slab with no additional compensation cess. This is a considerable reduction from the previous tax burden, translating into substantial savings for consumers.

Luxury Cars with New GST-Linked Prices: A Detailed Breakdown

This price revision has directly benefited a wide range of models. Here’s a breakdown of how popular Mercedes-Benz and BMW models have been impacted by the new GST rates.

Note: All prices are in ₹ lakh and are ex-showroom. The price list above is for select models and is indicative of the price change. Final prices may vary based on specific variants and optional features.

Luxury Market Outlook Post-GST Cut

The new GST rates are a game-changer for the Indian luxury car market. The steepest price drops are seen in the most sought-after flagship models.

• The Mercedes-AMG G 63 is a prime example, now a massive ₹25.65 lakh cheaper, solidifying its position as one of the biggest gainers of this tax reform.
• Similarly, flagship luxury SUVs like the Maybach GLS 600 and the BMW X7 see major benefits, enhancing their value proposition in the ultra-luxury segment.
• It’s important to note that this reform has a different impact on electric vehicles. Luxury EVs, such as the Mercedes-Benz EQS and EQE range, remain unaffected. This is because they were already enjoying a significantly lower, concessional GST rate of 5%.

Conclusion: A New Era for Indian Luxury Car Buyers

The GST 2.0 reform is a landmark development for India’s automotive sector. By simplifying the tax structure and reducing the overall tax burden on luxury cars, the government has made these vehicles more accessible to a wider segment of affluent buyers. The revised prices are expected to drive up demand in the premium segment, particularly for high-value SUVs and performance-oriented models that have seen the most significant price reductions.

With the implementation date set for September 22, 2025, customers planning their purchase for the festive season-especially during Navratri-can already begin to benefit. Many dealerships are offering early booking options now, while ensuring that invoicing is completed post-implementation, so buyers can take full advantage of the reduced GST pricing.

Whether you’re considering iconic models like the Mercedes-AMG G 63, Maybach GLS 600, or the BMW X7, this is the perfect time to act. Luxury is now more within reach, and our team is here to make your purchase experience smooth and rewarding.

Enquire now, and let us help you book your dream car at the new, reduced prices-along with exclusive ongoing festive offers.