In a move that is sure to bring cheer to car buyers across the nation, Mahindra & Mahindra has announced a significant price reduction for its popular SUV, the XUV700. This comes as a direct result of the Indian government’s decision to revise the Goods and Services Tax (GST) rates on automobiles. The price cut makes the highly sought-after XUV700 more affordable, with savings going up to ₹1.43 lakh on certain variants.
The GST Council, in its 56th meeting on September 3, 2025, approved a major overhaul of the tax structure for vehicles. This landmark decision is aimed at making personal mobility more accessible to a wider range of customers and providing a much-needed boost to the Indian automobile industry.
While the new GST rates are officially set to be implemented from September 22, 2025, Mahindra has taken the lead by passing on the benefits to its customers with immediate effect from September 6, 2025.
Understanding the GST Cut
Before this revision, large SUVs like the Mahindra XUV700 were placed in a high tax bracket. They attracted a GST of 28% along with a cess of up to 22%, which brought the total tax incidence to nearly 50%. The new GST structure has rationalized these rates. Now, vehicles that are longer than 4 meters and have an engine capacity of over 1,500cc will be subjected to a flat GST rate of 40%.
This reduction in the overall tax from around 48% to 40% has enabled Mahindra to slash the ex-showroom prices of the XUV700. The move is seen as a proactive step by the company to make its flagship product more competitive and appealing to potential buyers, especially with the festive season just around the corner.
New Prices of Mahindra XUV700
The price reduction for the Mahindra XUV700 varies across its different variants. The company has ensured that the benefit of the lower GST is passed on transparently to the customers. Here is a look at the approximate savings you can expect on some of the popular XUV700 variants:
- Top-end Variants: The highest price cut of up to ₹1.43 lakh will be seen on the top-tier models of the Mahindra XUV700.
- Mid-level Variants: Customers looking to buy the mid-range variants can also expect substantial savings, making them a more attractive value proposition.
- Base Models: Even the entry-level variants of the XUV700 will see a significant price drop, making it easier for many to own this feature-packed SUV.
It is advisable for prospective buyers to get in touch with their nearest Mahindra dealership to get the exact on-road price of the variant they are interested in.
What Does This Mean for Car Buyers?
This price cut is excellent news for anyone who has been planning to buy the Mahindra XUV700. The significant reduction in price means that the overall on-road cost of the vehicle will also come down. This could translate to lower equated monthly installments (EMIs) for those who are planning to finance their purchase, making the XUV700 a more budget-friendly option.
The timing of this announcement is also crucial. It comes just ahead of major Indian festivals like Navratri and Diwali, a period that usually sees a surge in vehicle sales. The lower prices are expected to further fuel this demand and encourage many fence-sitters to make their purchase.
Impact on the Indian Car Market
Mahindra is not the only automaker to announce a price cut following the GST revision. Several other major car manufacturers in India, including Tata Motors, Hyundai, and Toyota, have also declared that they will be passing on the GST benefits to their customers. This is expected to trigger a healthy competition in the market, ultimately benefiting the consumers.
The overall sentiment in the automobile industry is positive. Industry experts believe that the government’s decision to rationalize the GST rates will lead to a revival in demand across various vehicle segments. This will not only help the car manufacturers but also the numerous ancillary industries that are dependent on the automobile sector.
The Mahindra XUV700 has been a runaway success in the Indian market since its launch, thanks to its bold design, advanced features, powerful engine options, and superior safety. With this new price cut, the XUV700 is poised to strengthen its position as a leader in the premium SUV segment.
The reduced prices make it an even more compelling package for those looking for a modern, safe, and powerful family vehicle. This move by Mahindra is a clear indication of its customer-centric approach and its commitment to providing value to its buyers.
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