New Delhi: Luxury car buyers in India have fresh reason to celebrate. With GST 2.0 rationalising tax on internal combustion engine (ICE) cars, prices of German luxury models have dropped sharply. From entry-level SUVs to flagship sedans, reductions now range between ₹1.8 lakh and ₹11 lakh, depending on the model.
Earlier, luxury ICE cars carried a steep 48–50 percent tax burden, which included 28 percent GST and an additional 20–22 percent compensation cess. With the cess removed and the tax rate fixed at a uniform 40 percent, luxury cars now fall in the same slab as mid-sized cars above four metres. EVs continue to enjoy a 5 percent GST rate.
Audi Cuts Across the Line-up
Audi India confirmed that the biggest benefit goes to its Q8 SUV, now cheaper by ₹7.8 lakh. The A6 sedan has become ₹3.64 lakh cheaper, while the Q3 SUV drops by ₹3.07 lakh. Other models such as the Q5 and Q7 have also been revised.
Mercedes Trims Flagship Prices
Mercedes-Benz has announced some of the sharpest reductions. Its flagship S-Class 4MATIC will now cost ₹1.88 crore, down from ₹1.99 crore, a cut of ₹11 lakh. The GLS 450d AMG Line drops by ₹10 lakh to ₹1.34 crore, while the GLE 450 4MATIC gets an ₹8 lakh correction. The E-Class Long Wheelbase, one of Mercedes’ top-sellers, is now ₹6 lakh cheaper.
BMW Matches With SUV and Sedan Discounts
BMW has lowered the price of its flagship X7 SUV by ₹8.9 lakh, bringing it down to ₹1.25 crore. The smaller X1 SUV is now ₹1.8 lakh cheaper at ₹50.6 lakh. In sedans, the BMW 5 Long Wheelbase is reduced by ₹4.1 lakh and the 3 Series LWB by ₹3.4 lakh.
Luxury Car Market Outlook
The Indian luxury car market crossed 50,000 units for the first time in FY25, led by Mercedes-Benz with nearly 19,000 units, followed by BMW at over 15,000 units and Jaguar Land Rover at just over 6,000 units. With GST rationalisation, dealers expect sales momentum to rise further, especially in the festive season when buyers time deliveries with auspicious dates.
For enthusiasts, the new pricing means models once seen as distant aspirations may now feel slightly closer. It is not every day that the S-Class or the X7 drops by nearly a million rupees.