The Goods and Services Tax (GST) is a significant factor in the final price of any vehicle in India, including the popular Mahindra XUV 3XO. The GST rate for a car is determined by its engine size and length, which places the XUV 3XO in a specific category and impacts its price best things.
Understanding the GST on Cars new gst orders🚗💨
- In India, vehicles are classified and taxed under a two part GST structure a base on a GST rate and an additional compensation cess. The tax on structure was recently revised and under what is being called GST Reform 2.0, which has simplified the taxation on cars and reduced the overall burden for consumers. The new structure, effective from September 22, 2025, has set up two primary tax slabs for cars with internal combustion engines (ICE):
- 18% GST for small cars.
- 40% GST for all other vehicles.
- This new system has done away with the variable compensation cess that previously ranged from 1% to 22%, which was a major factor in a car’s final price. The old tax rates, which included GST plus cess, ranged from 29% for small petrol cars to 50% for large SUVs. The new, streamlined rates are a welcome change for both manufacturers and buyers.
How the Mahindra XUV 3XO is Taxed
The Mahindra XUV 3XO falls into the “small car” category for GST purposes due to its specifications. According to the government’s classification, a small car is defined as one that is less than 4 metres in length with a petrol engine below 1,200 cc or a diesel engine below 1,500 cc. new gst rate The XUV 3XO’s engine and dimensions fit this criteria perfectly, which means it now benefits from the lower 18% GST rate. This is a significant reduction from the previous tax rates, which were 29% for the petrol variants and 31% for the diesel variants.
New Vehicle Type Old GST + Cess
New GST Rate Effective Reduction
- the XUV 3XO (Petrol) 29% 18% 11%
- the XUV 3XO (Diesel) 31% 18% 13%