Small Cars to Get Cheaper as GST Cut to 18% from Sept 22, 2025 – Festive-Season Could Benefit

From September 22, 2025, the GST cut on small cars from 28% to 18% will officially kick in — just in time for the festive season.

This small car GST 18% slab means a direct car price reduction in late September 2025 for some of India’s most-loved hatchbacks and compact SUVs, especially cars under 1200cc and sub-4 meter cars that consistently dominate the urban market.

With festive season car discounts 2025 likely to stack on top, buyers could be looking at the best time to buy a small car in over a decade.

This article explores how much you could save on each model, and why dealers are already bracing for a booking rush.

Small Car GST Cut 18% – Price Impact (Effective Sept 22, 2025)

*Prices are approximate ex‑showroom Delhi; for base petrol variants (or qualifying diesel trims); and rounded for clarity. Actual prices may vary by city, variant, and dealer.

18% GST for Maruti Swift – How much will you save?

The Swift, already a crowd favorite, will see its on-road price drop by around ₹88,000 on the base petrol variant. That’s thanks to the removal of the 1% cess and the GST drop to 18%.

For young buyers and city commuters, the Swift’s peppy engine and easy maneuverability have always been a draw. Now, with this price cut, it’s not just a fun choice — it’s a financially smarter one.

Anticipate longer waiting periods as festive bookings pour in.

18% GST for Tata Nexon – Does the GST cut make it a steal?

Tata’s best-selling compact SUV qualifies under the small car definition in its petrol and diesel trims under 1,500cc, but it’s the sub-4 meter cars category that really benefits here. You can expect a ₹1.05 lakh reduction on entry variants.

Nexon’s 5-star safety rating, robust build, and feature-rich cabin already make it a segment leader. With the GST cut, buyers who were eyeing mid-trims might now stretch to higher variants without breaking their budget — a win-win for both customers and Tata dealers.

18% GST for Maruti Baleno – Will premium hatch buyers benefit?

Yes, and handsomely. The Baleno’s base petrol variant should get cheaper by roughly ₹85,000.

Popular for its smooth drive handling, well-spaced interiors, and premium elements, the Baleno has been a favored choice for a long time, particularly for people upgrading from entry-level hatchbacks.

The latest September 2025 GST price drop could accelerate this upgrade frequency. This could greatly benefit customers (especially families) looking to buy during Navratri or Diwali.

18% GST for Mahindra XUV 3XO – How big is the drop?

Mahindra’s stylish sub-4m SUV will see a price dip of about ₹95,000 on lower petrol trims.

The XUV 3XO’s bold design, plush interiors, and tech-loaded dashboard have made it a head-turner. With the GST cut, it becomes even more competitive against rivals like Venue and Sonet, especially for buyers who want SUV presence without stretching to the mid-size segment.

18% GST for Hyundai Venue – Will it be the festive season bestseller?

Almost certainly. Venue’s starting price is set to fall by around ₹79,400.

Compact yet premium, the Venue appeals to both first-time SUV buyers and urban professionals. Add Hyundai’s aggressive festive offers to the GST cut, and you have a recipe for record-breaking sales this October.

18% GST for Tata Tiago – How much more affordable?

The Tiago’s base petrol variant will be cheaper by about ₹50,000.

For budget-conscious buyers, this is a significant saving. The Tiago’s solid build, youthful design, and frugal running costs make it a smart “first car” — and now, an even easier decision for those entering the market.

18% GST for Kia Sonet – Does the diesel get the same benefit?

Yes — the Sonet’s diesel and petrol variants under the small car criteria will see a cut of roughly ₹90,000 on base trims.

The Sonet’s youthful styling, premium interiors, and wide variant spread have made it a hit among younger buyers. This price cut could push many to book higher trims with added features, making the festive season a bumper one for Kia.

18% GST for Tata Altroz – Will the premium hatchback crowd rush in?

Probably. The Altroz is renowned for its 5-star safety rating, and it’s going to get cheaper by about ₹82,000 on entry variants.

The car’s sharp design, solid road manners, and spacious cabin already make it a strong choice. With the latest September 2025 GST cut, it could sway buyers away from rivals, especially customers who equally value safety and style.

18% GST for Hyundai i20 – How much will you pocket?

Expect savings of around ₹75,000 on the base petrol variant.

The i20’s premium nature, refined drive, and tech-blessed cabin have long justified its price tag. Now, with a lower entry point thanks to GST 2.0, it becomes even more accessible. This could especially benefit younger buyers and small families who want to buy a feature-rich hatchback.

18% GST for Honda Amaze – Will compact sedan buyers benefit too?

Absolutely. The Amaze’s petrol trims — part of the cars under 1200cc bracket — will see a reduction of about ₹85,000.

For those who prefer the boot space and comfort of a sedan, Amaze offers a refined drive and Honda’s reliability. The GST cut in late September 2025 could make it the go-to choice for buyers who want sedan comfort at hatchback prices.

Why September 22 is Your “Go” Date?

• The GST cut aligns perfectly with the start of Navratri, when sub-4 meter cars and hatchbacks see the highest booking spikes.
• Dealers are expected to roll out festive season car discounts 2025 on top of the tax cut, making this the best time to buy a small car in years.
• Lower EMIs and reduced insurance premiums (due to lower IDV) will further sweeten the deal.

Whether you’re eyeing a Swift for zippy city runs, a Nexon for safety, or a Venue for its SUV flair, the small car GST 18% reform is a rare double win — for your wallet and your wishlist.