The Goods and Services Tax (GST) plays a crucial role in determining the on-road price of vehicles in India. For both cars and two-wheelers, GST has a direct impact on affordability and buyer decisions. Among the most popular vehicles in the Indian market are the Mahindra XUV700, a premium SUV, and Honda two-wheelers like the Honda Activa, Shine, and Hornet. Recently, discussions around GST cuts and revised rates have raised questions about how much buyers can save.

This article explores the latest GST rates on Mahindra XUV700 and Honda bikes, the implications of GST cuts, and what this means for Indian consumers.

GST on Cars: Mahindra XUV700

The Mahindra XUV700, launched as a feature-rich SUV, is priced between mid-range to premium segments. In India, SUVs fall under the 28% GST slab with an additional compensation cess depending on engine capacity and length.

• Small cars: 28% GST + 1–3% cess
• Mid-size sedans: 28% GST + 15% cess
• SUVs like Mahindra XUV700: 28% GST + 22% cess

This brings the total tax rate for an SUV like the XUV700 to 50% (approx.). For example, if the ex-showroom price is ₹20 lakh, nearly ₹10 lakh of that is due to GST and cess.

Effect of GST on Mahindra XUV700 Price

• Ex-showroom price (approx.): ₹14–26 lakh (varies by model)
• After GST + cess: Adds nearly 40–50% on the base price
• On-road price: ₹18–32 lakh depending on city and RTO charges

Any Recent GST Cuts for Mahindra XUV700?

As of 2025, no official GST cuts have been announced for SUVs like the XUV700. However, industry experts and auto associations have urged the government to reduce cess on large vehicles, which could lower prices in the future.

GST on Two-Wheelers: Honda Activa & Honda Bikes

Two-wheelers are among the most common purchases in India, and GST has a major influence on their affordability.

• Standard GST on two-wheelers: 28%
• Electric two-wheelers: 5% (under FAME-II policy)

Honda Activa After GST Cut

When GST was first implemented in 2017, all two-wheelers attracted 28% tax. Later, in 2019, the GST Council reduced tax on two-wheelers under 150cc from 28% to 18%. This move significantly benefited buyers of scooters like the Honda Activa, India’s best-selling scooter.

For instance:

• Honda Activa Ex-showroom price: ₹75,000 – ₹90,000
• GST @18%: Adds around ₹13,500 – ₹16,000
• On-road price: ₹90,000 – ₹1.05 lakh depending on state taxes

This reduction made two-wheelers more accessible for the middle class and boosted sales across urban and rural India.

Honda Motorcycles After GST Cut

Honda’s other bikes like Shine (125cc), Unicorn (150cc), Hornet (160cc), and CB350 also benefited from the revised GST. For bikes above 150cc, GST remains 28%, but entry-level models continue to enjoy the 18% slab.

Why GST Cuts Matter for the Automobile Industry

1. Boost to Sales – Lower GST means reduced on-road prices, encouraging more buyers.
2. Growth in Rural Demand – Affordable two-wheelers like Activa are widely used in rural India.
3. Encouraging EV Adoption – A 5% GST on electric scooters makes EVs like Honda’s upcoming models more attractive.
4. SUV Market Stability – While SUVs face high taxes, demand remains strong. A possible cut could make premium cars like XUV700 more competitive.

Latest Updates on GST for Automobiles in 2025

• Two-wheelers under 150cc – Continue at 18% GST.
• Two-wheelers above 150cc – Attract 28% GST.
• Electric two-wheelers – Remain at 5% GST.
• SUVs like XUV700 – Still under 28% GST + 22% cess.
• Industry demand – Auto manufacturers are lobbying for uniform GST of 18% on all vehicles to improve affordability.

Buyer Insights

• If you are planning to buy a Honda Activa, the current GST rates are already favorable at 18%.
• For Mahindra XUV700 buyers, prices remain high due to heavy cess, but strong features and demand justify the cost.
• For Honda bikes above 150cc, GST is still high, which increases the final on-road price.
• Electric Honda scooters (future launches) will enjoy just 5% GST, making them the cheapest option in terms of tax.

Conclusion

The GST structure plays a defining role in how much Indians pay for cars and bikes. While Mahindra XUV700 remains in the high tax bracket, Honda two-wheelers like the Activa have benefited significantly from GST cuts. Going forward, any further revisions in GST rates will directly impact sales trends in India’s automobile market. Buyers should keep track of these changes to make informed purchase decisions.