The Goods and Services Tax (GST) rationalisation, popularly referred to as GST 2.0, has introduced significant price cuts across India’s automobile industry. Among the biggest beneficiaries of this new taxation regime are mass-market 7-seater SUVs, which are now set to become more affordable.
This development is expected to make popular models like the Mahindra XUV700, Tata Safari, and Toyota Fortuner more attractive for buyers. With lower GST slabs and the removal of compensation cess, prices for these large vehicles have been reduced by amounts ranging from thousands to several lakhs of rupees.
Impact of GST 1.0 on SUVs
Under the GST 1.0 regime, larger mass-market 7-seater SUVs were subjected to one of the highest tax structures. These vehicles were subject to a GST rate of 28 percent, along with an additional compensation cess ranging from 17 percent to 22 percent. As a result, the total tax incidence on such SUVs was in the range of 45 percent to 50 percent.
This heavy taxation directly impacted the ex-showroom prices of SUVs, making them relatively expensive for customers. Since the ex-showroom price is inclusive of GST and cess, buyers had to pay significantly more for these vehicles compared to smaller passenger cars or hatchbacks.
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GST 2.0 Reduces the Burden
In the newly introduced GST 2.0 structure, the tax regime for SUVs has changed considerably. Mass-market 7-seater SUVs will now fall into a 40 percent GST slab without any additional compensation cess. This reduction brings the total tax incidence down from the earlier 45–50 percent bracket to just 40 percent.
As a result, the ex-showroom prices of these SUVs are set to decline substantially. Since the ex-showroom price directly includes the GST amount, the removal of compensation cess under GST 2.0 means buyers will now benefit from a direct reduction in vehicle costs.
Timing of the New Prices
The revised GST rates under GST 2.0 will officially come into effect from September 22. This date coincides with the beginning of the nine-day Navaratri festival, a period that traditionally witnesses strong automobile demand in India.
Therefore, customers looking to purchase a new 7-seater SUV during the festive season will now be able to take advantage of these reduced ex-showroom prices.
Popular SUVs Covered Under GST 2.0
The list of popular mass-market 7-seater SUVs that will benefit from these tax reductions includes:
Hyundai Alcazar
Mahindra Scorpio-N
Mahindra XUV700
Tata Safari
Toyota Fortuner
Toyota Legender
MG Hector Plus
MG Gloster
Jeep Meridian
These models represent some of the most sought-after SUVs in India, and each of them is set to receive a notable price drop starting September 22.
Specific Price Reductions Across Models
The impact of GST 2.0 varies across models, with some SUVs witnessing minor reductions while others will see prices drop by more than ₹3 lakh.
The Hyundai Alcazar will see the lowest price reduction in the category, with ex-showroom prices dropping by up to ₹75,376. Mahindra’s Scorpio-N and XUV700, two of the company’s most popular SUVs, will each become cheaper by up to ₹1.45 lakh and ₹1.43 lakh, respectively. Tata’s Safari, another high-selling model in the segment, will also receive a similar reduction of ₹1.45 lakh.
In the higher premium mass-market segment, the Toyota Fortuner stands out with the largest reduction. Its price will fall by up to ₹3.49 lakh. Toyota’s Legender, a variant of the Fortuner, will also see a significant cut of up to ₹3.34 lakh.
Among MG Motor’s offerings, the Hector range, including the Hector Plus, will become more affordable by up to ₹1.49 lakh. MG’s Gloster, positioned as a premium SUV in the mass-market category, will benefit from a steep reduction of up to ₹3.04 lakh.
The Jeep Meridian will also witness a notable price drop, becoming cheaper by up to ₹2.47 lakh under the revised GST regime.
SUV-Wise Price Reduction Details
The breakdown of the maximum price reductions on popular 7-seater SUVs is as follows:
Hyundai Alcazar – up to ₹75,376
Mahindra Scorpio-N – up to ₹1.45 lakh
Mahindra XUV700 – up to ₹1.43 lakh
Tata Safari – up to ₹1.45 lakh
Toyota Fortuner – up to ₹3.49 lakh
Toyota Legender – up to ₹3.34 lakh
MG Hector range (including Hector Plus) – up to ₹1.49 lakh
MG Gloster – up to ₹3.04 lakh
Jeep Meridian – up to ₹2.47 lakh
These figures highlight the scale of price rationalisation under GST 2.0. For customers, this translates into significant savings, especially in the higher-end models like the Fortuner, Gloster, and Meridian.
Broader Implications for Buyers
The timing of these price cuts ahead of the festive season is significant. With Navaratri and Diwali being strong demand periods for the automobile sector, customers are now more likely to consider purchasing larger SUVs given the lower price points.
The reduction also enhances the value proposition of these vehicles, which were earlier seen as high-cost purchases due to heavy taxation.
Conclusion
The GST 2.0 regime has introduced a sweeping change in the pricing of mass-market 7-seater SUVs in India. By reducing the overall tax incidence from 45–50 percent to 40 percent, the government has effectively lowered the cost of ownership for these popular models.
From the Hyundai Alcazar to the Toyota Fortuner, almost every leading 7-seater SUV in the mass-market category will now be more affordable. With reductions ranging from ₹75,000 to nearly ₹3.5 lakh, customers across different budget segments will benefit.
As the new prices take effect from September 22, coinciding with the start of Navaratri, the Indian SUV market is set to see renewed enthusiasm from buyers. Whether it is Mahindra’s XUV700, Tata’s Safari, MG’s Gloster, or Toyota’s Fortuner, GST 2.0 ensures that these SUVs will now carry a more attractive price tag for customers nationwide.
