Mahindra XUV 3XO : The Indian automobile market has witnessed a major shake-up with the recent GST Council decision led by Finance Minister Nirmala Sitharaman. On 4 September, the Council announced one of the biggest indirect tax reforms since GST was rolled out in 2017. The move reduced the number of GST slabs and offered relief across multiple sectors, including the automobile industry.
This change has directly impacted Mahindra & Mahindra Ltd., India’s largest SUV maker by revenue. The company has now passed on the full benefit of the revised GST rates to its customers, making popular models like the Bolero, Scorpio Classic, Scorpio N, Thar, Thar Roxx, XUV 3XO, and XUV 7OO significantly more affordable.
Interestingly, many people have raised questions about GST rates on cars and SUVs. Let’s clear the confusion one by one.
What is the GST on the Mahindra XUV 3XO?
The Mahindra XUV 3XO, being an SUV, was earlier taxed at a higher slab under GST along with a compensation cess. With the recent reforms, Mahindra has confirmed that it has fully transferred the benefit of the GST rate cut to buyers. Depending on the variant, the XUV 3XO is now cheaper by up to ₹2.56 lakh, thanks to the reduction in GST and the removal of the compensation cess.
What is the GST rate for SUV cars?
As per the GST Council’s revised definition, an SUV is classified as a vehicle above 4 meters in length, with an engine capacity greater than 1,200cc (petrol) or 1,500cc (diesel). Earlier, SUVs attracted 28% GST plus a compensation cess, making them significantly costlier.
However, post the 4 September 2025 reform, the Council has rationalized the slabs. SUVs now fall under a simplified taxation structure, with the earlier 28% slab and cess removed. This directly translates into reduced ex-showroom prices for leading SUV models in India.
What is the GST rate for cars?
The new GST structure has brought clarity to the taxation of cars in India:
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Small cars: Defined as cars under 4 meters in length with petrol engines up to 1,200cc or diesel engines up to 1,500cc. These cars now attract 18% GST.
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Other cars including SUVs: Larger cars, premium sedans, and SUVs will continue to face a higher GST slab, though without the earlier compensation cess.
This change has resulted in notable price drops across several segments, making vehicles more accessible to customers.
Will cars come under 18% GST?
Yes, but with conditions. Not all cars will come under the 18% GST bracket. Only “small cars” as per the government’s definition—length under 4 meters and engine capacity up to the specified limits—will enjoy the 18% GST rate.
Bigger vehicles, including SUVs, luxury sedans, and premium cars, will still be taxed at a higher slab. This means that while budget-friendly hatchbacks and compact sedans become cheaper, larger vehicles continue to carry higher tax rates, though slightly reduced compared to the earlier regime.
Revised Ex-Showroom Prices of Mahindra SUVs
After the GST rate cut, Mahindra has rolled out new pricing for its popular SUVs. Here’s a snapshot:
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Bolero – Cheaper by up to ₹1.27 lakh
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Scorpio Classic – Price cut of around ₹1.35 lakh
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Scorpio N – Reduced by nearly ₹1.40 lakh
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Thar & Thar Roxx – Up to ₹1.50 lakh cheaper
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XUV 3XO – Price reduction of up to ₹2.56 lakh
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XUV 7OO – Gains a price cut of up to ₹1.43 lakh
Additionally, Mahindra has offered extra benefits worth up to ₹1.29 lakh on its ICE SUVs, further sweetening the deal for buyers.
Conclusion
The GST Council’s decision to streamline tax slabs has come as a big relief for automobile buyers and manufacturers alike. By eliminating the compensation cess and rationalizing tax rates, cars—especially SUVs—have become more affordable. Mahindra’s decision to fully pass on the benefit to its customers means that this festive season, owning a Scorpio, Thar, or XUV 7OO might just be lighter on your pocket.
For consumers, the key takeaway is clear: Small cars will enjoy 18% GST, while SUVs and larger vehicles continue at a higher rate, though cheaper than before.