Good News for luxury car buyers as Mercedes, BMW, JLR, Audi, Volvo models get cheaper by up to ₹30 lakh
Good News for luxury car buyers as Mercedes, BMW, JLR, Audi, Volvo models get cheaper by up to ₹30 lakh
GST 2.0 rate rationalisation lowers tax burden on luxury vehicles; carmakers pass full benefits to customers ahead of festive season
The Indian luxury car market has received a major boost this festive season, with leading brands such as Mercedes-Benz India, BMW Group India, Jaguar Land Rover (JLR) India, Audi India and Volvo Car India announcing substantial price reductions across their portfolios. The development follows the implementation of the Goods and Services Tax (GST) 2.0 regime, which rationalised the tax structure for vehicles and brought luxury cars under a uniform 40% GST slab.
Previously, luxury vehicles attracted 28% GST along with a compensation cess of 20–22%, resulting in an effective tax rate of nearly 48–50%. With the revised structure, the tax burden has eased considerably, allowing manufacturers to pass on benefits of up to ₹30.4 lakh directly to buyers. The move not only lowers entry barriers for new customers but is also expected to encourage existing owners to upgrade to higher-end models.
Mercedes-Benz India has confirmed reductions of up to ₹11 lakh across its SUV and sedan line-ups. Popular SUVs such as the GLA 220d 4MATIC AMG Line are now cheaper by ₹3.8 lakh, while the flagship GLS 450d AMG Line sees a reduction of up to ₹10 lakh. Sedans too have benefited significantly, with the S 450 4MATIC now ₹11 lakh more affordable. BMW has announced price cuts ranging from ₹1.6 lakh on the 2 Series Gran Coupe to as much as ₹9 lakh on the X7.
Jaguar Land Rover India has offered some of the largest benefits, with reductions spanning ₹4.5 lakh on the Discovery to an impressive ₹30.4 lakh on select Range Rover variants. Audi India too has realigned its portfolio, with reductions of ₹3.07 lakh on the Q3, ₹7.83 lakh on the Q8, and up to ₹3.64 lakh on the A6 sedan. Volvo Car India’s SUVs, the XC60 and XC90, will now be cheaper by ₹4.79 lakh and ₹6.93 lakh respectively.
Industry experts view the tax reform as a landmark step. Amit Garg, Director of Shiva Group, which operates JLR dealerships in the Delhi-NCR region, noted that the revised pricing will significantly expand the luxury car customer base. “With lower prices, more customers will opt for luxury cars, and existing owners will be encouraged to move into higher segments. This is a win-win for both the industry and the consumers,” he said.
Electric vehicles remain unaffected by the restructuring, with GST continuing at 5% and no cess applicable. However, the broader benefits to the internal combustion engine (ICE) luxury segment are expected to drive record demand during the festive season.
The luxury car market in India has already witnessed remarkable growth, crossing 50,000 annual sales for the first time in FY25, with Mercedes-Benz leading at 18,928 units, followed by BMW at 15,266 and JLR at 6,183 units. With the new tax regime effective from September 22, 2025, industry analysts anticipate an even stronger performance in FY26.
Industry bodies like SIAM and FADA have welcomed the reform, noting that lower prices will not only lift sales but also strengthen allied industries like finance, insurance, and aftersales services.
The festive price cuts, coupled with the GST council’s bold restructuring, position India’s luxury car market on the cusp of a transformative growth phase, where world-class automobiles become accessible to a wider audience without compromising on brand exclusivity.
