Post-GST Reforms, Maruti Suzuki Cuts Car Prices by Up to Rs 1.29 Lakh

Maruti Suzuki has announced a significant reduction in price across its entire car portfolio, giving the full benefit of the recent GST cut to consumers.

Lower-end models are getting the largest discounts, with prices of Alto K10 and S-Presso cut by up to Rs 1.07 lakh and Rs 1.29 lakh, respectively.

Other bestselling hatchbacks such as the Celerio, Wagon-R, and Ignis are also receiving huge discounts, varying between Rs 71,300 and Rs 1.29 lakh.

The discounts also reach the compact SUV segment, with top-selling models such as the Brezza and Fronx receiving cuts of more than Rs 1 lakh, further boosting the competitiveness of Maruti Suzuki in the highly contested SUV segment.

The timing of these reductions is particular to the Indian auto industry, which has posted a four-month decline in passenger vehicle sales as manufacturers restricted dealer dispatches prior to the updated GST rates.

Industry insiders indicate that these reductions in prices, facilitated by GST reforms, should help drive demand, especially for the compact and entry-level segments that are favored by first-time buyers and urban commuters.

The GST Council recently gave its go-ahead for a streamlined tax framework, shifting to two broad slabs of 5% and 18% and doing away with the erstwhile four-slab system (5%, 12%, 18%, and 28%). This reformation does away with the compensation cess and primarily keeps GST at 18% for small cars and 40% for big or luxury cars, with electric vehicles still getting the preferential 5% rate.

Small, mass-market cars—that include petrol cars with engines between 1,200cc and diesel cars with engines up to 1,500cc (all below 4 meters in length)—get the biggest gain from the tax reduction.

Some leading auto companies, such as Mahindra & Mahindra, Tata Motors, Hyundai, Toyota, Kia, and Renault, have already decided on comparable price slashes, making their customers reap the whole benefit of the new GST regime.