Honda is slashing prices by up to ₹95,500 under the new GST 2.0 reforms, set to take effect from September 22, 2025.
Background: What Are the GST 2.0 Reforms?
In September 2025, the GST Council of India introduced a revised and rationalized GST structure for automobiles in what is popularly referred to as GST 2.0. The key changes include:
- A flat 18% GST rate on small cars (petrol ≤1,200 cc, diesel ≤1,500 cc, and length under 4 m), replacing the earlier ~28% GST plus cess.
- For larger vehicles, a revised 40% GST rate (down from around 45%, including cess).
- These reforms became effective on September 22, 2025. In response, Honda Cars India announced it would pass on the full benefit of these revised GST slabs to customers, reducing ex-showroom prices across its line-up.
Honda’s Price Reductions: Model-Wise Breakdown
Honda’s current Indian line-up includes just three primary models: the compact Amaze sedan (both 2nd-gen and 3rd-gen), the midsize City sedan, and the Elevate SUV. Each sees substantial price cuts:
• Honda Amaze (Compact Sedan)
- 2nd-generation Amaze: Price cut of up to ₹72,800.
- 3rd-generation (new) Amaze: Largest reduction—up to ₹95,500.
These models fall into the ≤ 4 m and lower engine displacement category, now taxed at 18% instead of nearly 29% (plus cess), yielding significant savings.
• Honda City (Midsize Sedan)
- Price reduced by up to ₹57,500.
There is also a hybrid (“e: HEV”) variant priced at ₹19,89,990 (ex-showroom Delhi), but Honda has not applied any cut to it, as the government has not extended GST relief to hybrid vehicles.
• Honda Elevate (SUV)
- Price cut up to ₹58,400.
Previously taxed at approximately 45%, these SUVs now fall under the revised 40% GST slab.
Effective Date and Festive Timing
All Honda price reductions—the largest being ₹95,500 on the new Amaze—take effect from September 22, 2025, the implementation date of GST 2.0 reforms.
This comes just ahead of Navratri and the broader festive season, enabling customers to book now, lock in both the GST-reduced prices and existing festive offers, with deliveries starting in Navratri.
Kunal Behl, Vice President—Marketing & Sales, Honda Cars India, emphasized that this move “comes at a very timely juncture for the Auto industry” and is aimed at improving vehicle affordability and stimulating festive demand.
Corporate Strategy & Market Impact
Why Honda Made This Move
- Pass-through of tax relief reflects Honda’s policy of transferring benefits directly to consumers.
- Honda’s lean line-up (only three ICE models) enables focused implementation.
- A strategic move to capitalize on the festive buying season as demand surges.
Consumer Implications
- Lower ex-showroom prices result in cheaper on-road prices, as registration, insurance, etc., are percentage-based.
- Customers of the new Amaze get the deepest cut—₹95,500, making compact sedan ownership significantly more accessible.
- City and Elevate have also become much more competitively priced versus rivals.
- Hybrid variant buyers get no cut—highlighting that the GST reforms did not extend to hybrids (only small ICE vehicles).
Wider Market Effect
- Honda joins other automakers like Tata, Audi, Mercedes-Benz, and more, in passing on GST 2.0 benefits across segments—from mass-market to luxury.
- This should increase competitive pressure and affordability across the industry.
Summary
In mid-September 2025, Indian automobile buyers were greeted with encouraging news: Honda Cars India is slashing prices by up to ₹95,500 on select models—part of a broader shift under the revised GST 2.0 regime, scheduled to come into effect September 22, 2025.
Understanding GST 2.0
Let’s begin with the backdrop. The GST Council, earlier this month, restructured tax slabs for automobiles. Compact ICE cars under 4 m with smaller engine capacities are now taxed at 18%, down from around 28% plus cess. Larger vehicles, including mid-size sedans and SUVs, now attract a flat 40% rate, trimmed from the previous effective rate of ~45% including cess. These streamlined rates aim to balance tax burdens and stimulate consumer demand.
Honda’s Response
Honda Cars India announced that it will fully pass on the benefit of this tax cut to consumers starting from September 22, 2025. With a compact line-up consisting only of the Honda Amaze, Honda City, and Honda Elevate, the company promised upfront price cuts: up to ₹72,800 on the older Amaze, a maximum of ₹95,500 on the newer Amaze, ₹57,500 on the City, and ₹58,400 on the Elevate.
Model-Wise Breakdown
- Honda Amaze (3rd Gen) receives the steepest cut—₹95,500—given its classification as a sub-4 m compact sedan now enjoying the 18% GST bracket.
- 2nd-Gen Amaze also receives a substantial ₹72,800 cut.
- Honda City, a midsize sedan, benefits from a ₹57,500 reduction—revised from 45% to 40% GST.
- Honda Elevate, the SUV in the line-up, is marked down by ₹58,400 under the new tax regime.
Notably, the City e: HEV hybrid variant—India’s only hybrid in the Honda line-up—is excluded from these reductions, as hybrids weren’t included in GST reliefs.
Timing: Perfect for Festive Shopping
These reductions align with India’s festive season purchasing cycle. As customers plan purchases during Navratri and Diwali, Honda encourages early bookings—enabling buyers to benefit from both the GST cuts and ongoing festive offers. Deliveries under the new pricing commence with the Navratri window. Kunal Behl, Vice President of Marketing & Sales (Honda Cars India), called this move “very timely” for boosting demand.
Consumer Impact & Broader Implications
The ex-showroom price directly influences the on-road cost. A lower base price translates to savings on registration, insurance premiums, and even loan interest components, meaning the actual cost difference could exceed ₹1 lakh for new Amaze buyers. The price cuts also make Honda models more competitive versus rivals from Tata, Hyundai, Maruti, etc.
Some buyers, especially considering hybrids, may feel left out—since hybrid models like City e: HEV weren’t given GST relief. Meanwhile, premium buyers who gravitate toward bigger SUVs or luxury models still pay higher GST rates.
Honda in a Wider Industry Movement
Honda is not alone. Other carmakers—Tata, Audi, Mercedes-Benz, MG, Hyundai, and others—have also announced up to several lakh rupees in price cuts under GST 2.0, across segments. This collective industry response reflects a transformative moment for affordability and competitiveness in India’s auto market.
Conclusion
To sum up:
- Honda Cars India is reducing ex-showroom prices of Amaze (up to ₹95,500), City (₹57,500), and Elevate (₹58,400) starting September 22, 2025.
- These reductions reflect the new GST 2.0 structure: 18% on small cars, 40% on larger vehicles.
- The most dramatic discount—on the 3rd-gen Amaze—makes it significantly more affordable in the compact sedan segment.
- Hybrid variants remain unchanged, as GST relief didn’t extend to electric or hybrid categories.
- This is strategically timed ahead of the festive season, and Honda urges customers to book early to avail of both tax-saving and festival offers.
- The move is part of a broader industry trend of passing on GST reductions to benefit buyers.