The Goods and Services Tax (GST) rate rationalisation has brought down the tax on luxury internal combustion-engine (ICE) vehicles to a uniform rate of 40%, bringing the levy on par with mid-sized mass market cars above 4 metres in length.

As the new rates take into effect from September 22, 2025, luxury German carmakers such as Mercedes-Benz, BMW and Audi as well as Tata Motors-owned Jaguar Land Rover (JLR) have slashed prices.

On Monday, Audi India announced revised prices across its product portfolio following the implementation of GST 2.0. The Audi Q8 SUV will see the biggest price cut of ₹7.8 lakh. The Audi Q3 will now cost ₹3.07 lakh less while the A6 sedan will now be priced ₹3.64 lakh lower.

JLR, too, slashed its cars prices to pass on the benefit of the recent GST rationalisation to customers in order to boost consumer demand. With this, the Range Rover brand will see price cuts from ₹4.6 lakh to ₹30.4 lakh. The Defender will see price cuts from ₹7 lakh to ₹18.6 lakh and the Discovery brand from ₹4.5 lakh to ₹9.9 lakh.

“With benefits ranging from ₹2.6 lakh to over ₹7.8 lakh depending on the model, the updated prices make Audi’s range of luxury cars and SUVs more accessible, adding momentum to customer demand ahead of the festive season,” the carmaker said in a statement.

Mercedes-Benz India, too, has passed on the entire benefit of the GST reduction directly to the end customers.

Merc’s flagship model, the S-Class 4MATIC, will see the highest price reduction of ₹11 lakh, dropping the price from ₹1.99 crore (ex-showroom) to ₹1.88 crore. The GLS 450d AMG Line will see its price go down by ₹10 lakh, at ₹1.34 crore, whereas the GLE 450 4MATIC will now cost ₹8 lakh less than earlier. The top-selling E-Class Long Wheelbase will not get cheaper by ₹6 lakh.

Its German rival BMW Group has cut the price of its flagship X7 SUV by ₹8.9 lakh, bringing it down from ₹1.34 crore (ex-showroom) to ₹1.25 crore. The enter luxury SUV in BMW’s portfolio, the X1, sees a ₹1.80 lakh reduction, dropping the price to ₹50.6 lakh (ex-showroom). In sedans, the BMW 5 Long Wheelbase will see a ₹4.10 lakh cut and the BMW 3 LWB by ₹3.40 lakh.