The Indian auto sector is undergoing a historic shift with the arrival of GST 2.0, a step aimed at reducing the taxation levied on passenger vehicles and boosting car sales. In the example of Mahindra & Mahindra, the country’s leading SUV manufacturer, the step has led to steep pricing discounts on its entire ICE SUV line-up. Customers can now avail up to ₹1.56 lakh off such top-selling vehicles as the XUV3XO, Thar, Scorpio-N, and XUV700.
The new tax regime comes into effect after the meeting of the 56th GST council held on September 3, 2025. It sets the record straight regarding the historical injustices meted out under the earlier GST regime, wherein SUVs were taxed at very high rates of up to 50% (inclusive of cess). GST 2.0 taxes only 40% for the larger-sized SUVs, and sub-4 metre petrol and diesel SUVs get deeper cuts.
Table of Contents
GST Impact on Mahindra Cars up to 1200cc and up to 4000mm
It is also where GST 2.0 makes the greatest impact for Mahindra vehicles. Previously taxed between 29–31%, sub-4m SUVs now fall to an 18% slab with a double-digit tax advantage. For sub-4m SUVs ranging from the XUV3XO to even the Bolero Neo, it translates into a historic reduction of up to ₹1.56 lakh.
The XUV3XO Diesel is also GST 2.0’s overall biggest beneficiary, and the perennial semi-urban and rural India favourite Bolero Neo becomes even more attractive with over ₹1.27 lakh worth of savings. For such families and young professionals in need of an economically competitive SUV solution, this transition makes smaller cars from Mahindra more competitive than ever.
Price Changes for Mahindra Small SUVs — Indicative Ranges (Ex-showroom)
| Car / Variant | Price Before GST Update | Price After GST Update | Difference |
| Bolero Neo | ₹11,55,000 – ₹11,70,000 | ₹10,20,000 –₹10,35,000 | ₹1,20,000 –₹1,50,000 |
| XUV3XO (Petrol) | ₹12,60,000 –₹12,80,000 | ₹11,20,000 – ₹11,35,000 | ₹1,30,000 –₹1,60,000 |
| XUV3XO (Diesel) | ₹13,85,000 –₹14,05,000 | ₹12,25,000–₹12,40,000 | ₹1,45,000 –₹1,80,000 |
| Thar 2WD (Diesel) | ₹12,25,000 –₹12,45,000 | ₹10,90,000 – ₹11,00,000 | ₹1,25,000 –₹1,55,000 |
For Mahindra, this segment is where GST 2.0 has levelled the playing field. Buyers who were earlier hesitant due to high on-road costs now find these SUVs firmly within reach, ensuring a likely surge in demand.
GST Impact on Mahindra Cars with more than 1200cc and more than 4000mm
Full-size Mahindra SUVs were hit hardest in the old GST regime because they were charged nearly 50% after cess addition. With GST 2.0 shaving off a neat 40% flat, customers who purchase big SUVs like Scorpio-N, Thar Roxx, and XUV700 now save over a lakh. Even though this reduction is a smaller percentage than that witnessed by sub-4m SUVs, the absolute savings again have a huge psychological impact among high-end customers.
Scorpio-N and XUV700, among Mahindra’s most premium SUVs, now come with discounts of ₹1.43–₹1.45 lakh, bringing them into a close fight with their competitors like Hyundai Creta, Kia Seltos, and Toyota Fortuner. Even their new Thar Roxx offers discounts across various models, with its top variant, the AX7 L, having a reduction of ₹1.33 lakh.
Price Changes for Mahindra Larger SUVs
| Car / Variant | Price Before GST Update | Price After GST Update | Difference |
| Thar 4WD (Diesel) | ₹15,90,000 –₹16,30,000 | ₹14,95,000–₹15,20,000 | ₹95,000 – ₹1,10,000 |
| Scorpio Classic | ₹15,70,000 –₹16,00,000 | ₹14,70,000 – ₹14,95,000 | ₹95,000 – ₹1,10,000 |
| Scorpio-N | ₹21,20,000 –₹21,80,000 | ₹19,80,000 – ₹20,25,000 | ₹1,35,000–₹1,55,000 |
| Thar Roxx (5-door) | ₹18,40,000 –₹18,80,000 | ₹17,10,000 – ₹17,45,000 | ₹1,25,000–₹1,40,000 |
| XUV700 | ₹23,60,000 –₹24,10,000 | ₹22,15,000 – ₹22,60,000 | ₹1,35,000–₹1,55,000 |
These discounts make Mahindra’s large SUVs high-value propositions. For individuals who desire space, power, and features but don’t want to achieve luxury-car price points, GST 2.0 makes Scorpio-Ns and XUV700s more attractive than ever.
Summary: How has the GST update affected Mahindra cars
The introduction of GST 2.0 has been a boon to Mahindra cars, offering some of the deepest discounts ever seen in the Indian SUV market. Sub-4m models like XUV3XO and Bolero Neo save the maximum percentage with up to ₹1.56 lakh, while higher-end SUVs like Scorpio-N, Thar Roxx, and XUV700 avail discounts above ₹1 lakh.
For Mahindra, whose entire portfolio is almost SUV-led, this reform couldn’t have come at a better time. Passing on the complete tax benefit to customers is an initiative that has strengthened the brand’s image as India’s SUV specialist and has also directly provided customers with relief. Implications will be a boost in demand among both rural customers and metropolitan customers—Bolero Neo among smaller townsfolk and high-end SUVs such as Scorpio-N and XUV700 among metropolitan customers.
Overall, GST 2.0 swings the Indian auto sector into Mahindra’s favour. It does not merely bring entry-level SUVs within easier reach for initial SUV customers but also puts aspirational SUVs within even easier reach. In the months to come, Mahindra will be able to witness increased volumes, improved market share, and regained domination within India’s SUV sector.
FAQs
Q. How has GST 2.0 impacted Mahindra cars?
GST 2.0 has reduced taxes on SUVs, leading to price cuts of ₹81,000 to ₹1.56 lakh across Mahindra’s ICE SUV lineup, including the Thar, Scorpio-N, and XUV700.
Q. Which Mahindra model gets the highest GST 2.0 benefit?
The XUV3XO Diesel receives the highest benefit, with a price cut of up to ₹1.56 lakh under the revised GST slabs.
Q. What are the GST 2.0 rates for SUVs like the Thar and Scorpio?
Previously taxed at 48% (including cess), these SUVs are now taxed at 40% flat, resulting in savings of over ₹1 lakh depending on the variant.
Q. From when are the new Mahindra car prices effective?
Mahindra implemented the new prices from 6th September 2025, passing on full GST benefits to all bookings and deliveries made on or after this date.
Q. How does GST 2.0 affect Mahindra’s plans?
While ICE SUVs get more affordable, Mahindra will continue to push its upcoming EV portfolio (XUV.e8, BE.05, BE.07), ensuring relevance across both ICE and electric mobility segments.
