Mercedes-Benz India has announced a significant price reduction across its entire range of cars and SUVs, following the rollout of the new GST 2.0 framework by the Government of India. The reform, which comes into effect from September 22, 2025, rationalises the tax structure by placing passenger vehicles under a simplified 40% GST slab, compared to the earlier system of 28% GST plus an additional cess of up to 22%. This effectively brings down the overall tax incidence on premium and luxury cars from around 50% to 40%.
Electric vehicles, however, remain the biggest beneficiaries of India’s progressive tax policy, as they continue to attract a concessional 5% GST, ensuring affordability and long-term encouragement for clean mobility.
Mercedes-Benz confirmed that it will pass on the full benefit of the tax reduction to customers, ensuring that buyers directly experience the impact of this reform. The move comes just ahead of the festive season, a time when demand for luxury cars typically sees an uptick, making the price cuts especially timely.
Key Price Reductions Across Models
The reduction in GST rates has resulted in price drops ranging from Rs 2.6 lakh to over Rs 11 lakh across Mercedes-Benz India’s portfolio.
GLA 220d 4MATIC AMG Line – now costs Rs 52.70 lakh, down Rs 3.8 lakh from the earlier Rs 56.50 lakh.
GLC 300 4MATIC – now at Rs 73.95 lakh, a reduction of Rs 5.3 lakh compared to the earlier price of Rs 79.25 lakh.
GLE 450 4MATIC – revised to Rs 1.07 crore, down Rs 8 lakh from the earlier Rs 1.15 crore.
GLS 450d AMG Line – now priced at Rs 1.34 crore, down from Rs 1.44 crore (benefit of Rs 10 lakh).
A200d – the entry-level sedan now starts at Rs 45.95 lakh, down Rs 2.6 lakh from its earlier price of Rs 48.55 lakh.
C300 AMG Line – revised to Rs 64.30 lakh, lower by Rs 3.7 lakh from Rs 68 lakh.
E-Class LWB 450 4MATIC – revised to Rs 91 lakh, Rs 6 lakh lower than its earlier price of Rs 97 lakh.
S 450 4MATIC – the flagship sedan is now available at Rs 1.88 crore, reduced by Rs 11 lakh from Rs 1.99 crore.
Industry Impact
Luxury cars in India have long been taxed heavily, with effective rates nearly doubling the ex-factory cost. The GST 2.0 reform addresses this concern by streamlining the tax structure and removing the cess component that disproportionately impacted premium vehicles.
By reducing taxes, the government aims to improve affordability, stimulate demand, and create a positive ripple effect across the automotive value chain. For luxury brands like Mercedes-Benz, this reform is expected to boost demand in Tier 1 cities as well as emerging Tier 2 and Tier 3 markets, where aspirational buyers have been waiting for a more accessible entry point.
The timing of this announcement is significant. With the festive season around the corner, Mercedes-Benz expects a surge in bookings and deliveries. The reduction in prices also strengthens the brand’s position in India’s luxury market, where it already holds a leadership role.
