The reduction in GST and abolition of compensation cess has brought a huge sign of relief for vehicle buyers as well as manufactures. This has had a direct impact on the prices of all vehicles including cars and two-wheelers. As a result, OEMs have started announcing the revised prices of all their respective models.
Toyota is the latest OEM to pass on the GST benefits to the customers. The Japanese auto giant has announced a price reduction on all its cars, post implementation of the new GST rates. The new prices will take effect from 22 September 2025, the same day the new GST rates come into effect. The company has requested customers to confirm bookings at the earliest before the festive season kick off in order to ensure timely delivery.
Making this announcement, Varinder Wadhwa, Vice President, Sales-Service-Used Car Business & Profit Enhancement said: “We sincerely thank the Government of India, for this historic reform. It has not only enhanced affordability for customers but also strengthened overall confidence in the auto sector. Ahead of the festive season we expect this step will provide strong momentum and further accelerate demand.”
Toyota price cut
The latest update has seen significant price cuts for Toyota models, the highest being the Fortuner which will see a price drop of up to Rs 3.49 lakh. This is followed by its premium variant — Legender — by up to Rs 3.34 lakh. Prices for Fortuner and Legender start at Rs 36.05 lakh and Rs 44.51 lakh (both ex-showroom), respectively. The Japanese carmaker is expected to announce the revised prices of each variant of every model in the lineup soon.
| Model | Reduction in Price |
| Glanza | Up to INR 85,300 |
| Taisor | Up to INR 1,11,100 |
| Rumion | Up to INR 48,700 |
| Hyryder | Up to INR 65,400 |
| Crysta | Up to INR 1,80,600 |
| Hycross | Up to INR 1,15,800 |
| Fortuner | Up to INR 3,49,000 |
| Legender | Up to INR 3,34,000 |
| Hilux | Up to INR 2,52,700 |
| Camry | Up to INR 1,01,800 |
| Vellfire | Up to INR 2,78,000 |
New GST rates: More affordable cars
The revised GST structure has reduced car prices across segments. Small cars under 4 metres, with petrol engines up to 1,200cc or diesel engines up to 1,500cc, will now attract 18% GST instead of 28%, making them 5–13% cheaper. Larger cars over 4 metres with bigger engines will be taxed at 40% GST instead of 28%. However, with the removal of cess, their overall tax burden has eased, bringing prices down by 3–10%.
Luxury brands such as Mercedes-Benz, Audi, BMW, and Jaguar Land Rover, which were previously taxed at 50% (28% GST plus 22% cess), will now face a flat 40% rate , therefore, substantially reducing costs. Overall, the update benefits buyers of small, mid-size, and luxury vehicles alike.
