Big GST Cut Likely on Small Cars This Diwali: How Much You Could Save on Alto, Swift, Dzire & More

As Diwali approaches, car buyers—especially those in the middle-income segment—may get a welcome surprise from the government. The Centre is reportedly considering a significant reduction in Goods and Services Tax (GST) on small passenger cars to make car ownership more affordable for first-time buyers and families. While nothing has been officially confirmed yet, discussions suggest GST on cars could drop from the current 29% (28% GST + 1% cess) to just 18%, offering buyers up to 10% direct savings.

To understand the impact of this potential tax cut, here’s how much customers could save on some of Maruti Suzuki’s most popular models if the new GST rate is implemented:

1. Maruti Suzuki Alto K10
The Alto K10, known for its affordability and practicality, currently has an ex-showroom price of ₹4.23 lakh. After adding the existing 29% tax, the on-road cost rises by around ₹1.22 lakh. If GST drops to 18%, the tax would fall to roughly ₹80,000, resulting in estimated savings of ₹42,000. That’s a big deal for someone buying their very first car.

2. Maruti Suzuki WagonR
For families looking for more cabin space, the WagonR has always been a top choice. Its current ex-showroom price is ₹5.78 lakh, with tax adding another ₹1.67 lakh under the present regime. A GST cut could reduce that tax burden to ₹1.09 lakh, putting about ₹58,000 back into the customer’s pocket—enough to cover insurance or even an extended warranty.

3. Maruti Suzuki Swift
The Swift, with its sporty looks and reliable performance, starts at an ex-showroom price of ₹6.49 lakh. At the current tax rate, buyers pay about ₹1.88 lakh. If GST is cut to 18%, the tax would drop to ₹1.23 lakh, giving buyers a potential benefit of ₹65,000. This could sway those undecided between budget and premium hatchbacks.

4. Maruti Suzuki Dzire
A favorite in the compact sedan segment, the Dzire is priced at ₹6.83 lakh (ex-showroom). With the current tax rate, buyers pay around ₹1.98 lakh in taxes. With GST at 18%, this could reduce to ₹1.29 lakh, saving customers about ₹68,000—enough to convince budget-conscious buyers to take the plunge.

5. Maruti Suzuki Brezza
For SUV lovers, the Brezza has been a consistent performer. Priced at ₹8.69 lakh ex-showroom, it currently attracts ₹2.52 lakh in taxes. A reduced GST would bring that figure down to ₹1.65 lakh, translating into savings of nearly ₹87,000. That’s not just a discount—it’s almost like getting an upgrade for free.

6. Maruti Suzuki Ertiga
Finally, for larger families or road trip enthusiasts, the Ertiga offers both space and comfort. Its starting price is ₹9.11 lakh, and it currently carries ₹2.64 lakh in taxes. With GST at 18%, the tax would drop to around ₹1.73 lakh, letting customers save nearly ₹91,000—enough to fund a vacation or cover the next EMI.

A Festival Season Game-Changer?
If this GST reduction goes through, it could be a game-changer for the Indian auto market, especially during the festive season. For many middle-class families, the price drop could make owning a car finally possible. It’s not just about affordability; it’s about accessibility.

The move could also boost sales of models like the Alto, WagonR, Swift, and Dzire, which already dominate the first-time buyer segment. Bigger models like the Brezza and Ertiga, too, could see stronger demand thanks to potential savings nearing ₹90,000.

While the GST cut is still under discussion, the very prospect has already sparked excitement among carmakers and customers alike. If implemented, it wouldn’t just lower the cost of ownership—it could also drive a wave of purchases this Diwali. For now, all eyes are on the government’s next move.