Key highlights
- GST on small cars drops to 18%, making entry-level models more affordable for Indian buyers.
- Premium and luxury vehicles now fall under a simplified 40% slab, bringing clarity to high-end purchases.
- SAVWIPL pledges to pass on benefits across its six-brand portfolio, from Škoda and Volkswagen to Bentley.
Skoda Auto Volkswagen India Private Limited (SAVWIPL) has welcomed the Government of India’s latest GST overhaul, calling it a landmark move that reshapes the automotive landscape. The reform introduces a two-slab structure i.e. 18% for small cars and 40% for premium and luxury vehicles replacing the earlier fragmented system that often confused buyers and complicated pricing strategies.
SAVWIPL, which represents six global brands in India namely, Skoda, Volkswagen, Audi, Porsche, Lamborghini, and Bentley says the new structure will drive affordability at one end and simplify aspiration at the other.
What changes and why it matters
The GST Council’s decision to reduce tax on small cars from 28% to 18% is a direct win for middle-class buyers. It lowers the entry barrier for first-time car owners and boosts demand in the high-volume segment. On the flip side, the 40% slab for luxury vehicles replaces multiple rates and cess layers, offering transparency for premium buyers.
Piyush Arora, MD & CEO of SAVWIPL, summed it up well: “The shift to an 18% slab for small cars will enhance affordability and support stronger demand. The 40% slab for premium vehicles simplifies taxation and helps customers make informed choices with greater confidence.”
Impact across SAVWIPL’s brand portfolio
This reform touches every corner of SAVWIPL’s garage:
- Skoda and Volkswagen: Entry-level and mid-range models will benefit from the 18% GST slab, making them more competitive.
- Audi and Porsche: Luxury sedans and performance SUVs now fall under a unified 40% slab, removing pricing ambiguity.
- Lamborghini and Bentley: Ultra-luxury models get a clearer tax structure, which helps buyers plan better and manufacturers price smarter.
The company has confirmed it will pass on the benefits to customers across all brands, making both practicality and prestige more attainable.
A boost for the industry, not just buyers
Beyond price tags, the reform sends a strong signal to the auto industry. It creates a predictable tax environment, encourages investment, and supports long-term planning. Manufacturers can now align product strategies with clearer tax implications, while customers enjoy a more transparent buying experience.
This move also positions India as a more attractive hub for global automakers, balancing mass-market growth with premium brand expansion.
Also read: GST 2.0: Skoda India announces price cuts of up to Rs 3.30 lakh
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