Maruti Suzuki, India’s leading car manufacturer, has set a new sales record on the first day of Navratri, with approximately 30,000 cars sold across the nation. The company also reported receiving a substantial 80,000 inquiries, which indicates strong customer demand. This remarkable sales performance is directly linked to the recent modifications in the Goods and Services Tax (GST) rates, resulting in price reductions for numerous car models. Maruti Suzuki had already proactively reduced prices to ensure that the benefits of the GST changes were passed on to their customers. This is exemplified by the Alto K10, an entry-level model, now priced at ₹3,69,900, reflecting a reduction of ₹1,07,600. The Grand Vitara also experienced a similar price reduction, and is now priced at ₹10,76,500. The GST revisions, which came into effect on September 4, 2025, represent the most extensive tax reforms since GST was first introduced on July 1, 2017. The reforms streamlined the tax system by reducing the tax slabs from four (5%, 12%, 18%, and 28%) to two (5% and 18%). Under the updated GST framework, cars are classified based on factors such as length, engine capacity, and fuel type. Small cars, which are defined as those with a length less than 4 meters, a petrol engine smaller than 1,200cc, or a diesel engine smaller than 1,500cc, are subject to an 18% GST. Larger or luxury cars, those exceeding 4 meters in length, or with engines above the specified capacities, are taxed at 40%. Hybrid vehicles are subject to the same tax conditions as the larger cars, whereas electric vehicles maintain the advantageous 5% GST rate. Being India’s largest car manufacturer, Maruti Suzuki is positioned to gain significantly from these adjustments due to its strong focus on small car sales. However, it is imperative that all vehicle criteria are met to qualify for the lower tax bracket. For instance, while the Jimny is less than 4 meters long, its 1.5-liter petrol engine results in a 40% tax rate. Likewise, the Ertiga, even with an engine capacity of 1,198cc, is 4.3 meters long, thereby falling into the 40% GST category. Vehicles that fail to meet a single criterion are categorized into the higher tax bracket.
