There is a lot of excitement in the Indian automotive sector right now, as the new Goods and Services Tax (GST) rates have been announced. There will be a lot of changes in car prices after the new GST measures are effectively starts on 22nd September 2025. In this blog post, we will see how the new GST rates have affected the prices of popular SUV models like Mahindra XUV700 and Skoda Kyalq, and will also compare the features and pricing of these two SUVs.
Understanding the GST Rate Changes in 2025
In 2025, the Government of India implemented a new GST structure that makes cars much more affordable for middle-class consumers. Earlier, large SUVs attracted a GST rate of up to 50%. Now, as per the new GST rate, large SUVs and cars will attract a GST of 40%, which makes a significant difference in the final price.
GST reduction is part of a government initiative aimed at increasing consumption in the automobile sector and providing competitive pricing to consumers, especially for the high-end SUV segment. These new rates will be applicable from 22 September 2025.
GST 2.0 for All Cars – Overview of the New Rates
| Vehicle Category | Old GST Rate | New GST Rate | Effective Tax Rate |
|---|---|---|---|
| Small Cars (e.g., hatchbacks and compact sedans) | 28% + cess | 18% | 18% |
| SUVs & MUVs (e.g., large SUVs, crossovers) | 28% + cess | 40% | 40% |
| Electric Vehicles (EVs) | 5% | 5% | 5% |
| Hybrid Vehicles (e.g., hybrid sedans & SUVs) | 28% + cess | 40% | 40% |
Mahindra XUV700 (Price Update Post GST Revision)
Talking about the premium SUV segment, Mahindra XUV700 has already made its place in the market. Its eye-catching design, powerful engine options and useful features like ADAS have given it a strong presence among the players in the Indian market. Now, with the new GST rate revision, XUV700 offers even better value with its revised pricing.
Below you will find the updated pricing of Mahindra XUV700 which will be applicable after the revised GST comes into effect:
| Variant | Old Price (with 48% GST + Cess) | New Price (with 40% GST) | Savings (₹) |
|---|---|---|---|
| MX | ₹14,70,000 | ₹13,81,100 | ₹88,900 |
| AX3 | ₹16,40,000 | ₹15,33,500 | ₹1,06,500 |
| AX5 S | ₹17,60,000 | ₹16,49,800 | ₹1,10,200 |
| AX5 | ₹18,20,000 | ₹17,01,700 | ₹1,18,300 |
| AX7 | ₹19,90,000 | ₹18,58,100 | ₹1,31,900 |
| AX7 L | ₹21,00,000 | ₹19,57,000 | ₹1,43,000 |
Note: Prices are approximate and may vary a bit depending on dealer location and their regional offers.
Key Highlights of Mahindra XUV700 (Post GST Revision):
- Price Decrease: XUV700 has now become quite cheap, with buyers saving up to ₹1.43 lakh depending on the variant.
- Features: Comes with premium features like ADAS, panoramic sunroof and 3D sound system.
- Power Options: Both petrol and diesel variants are available, offering flexibility for different driving needs.
Skoda Kyalq – Price Update Post GST Revision
The Skoda Kyalq has also made the most of the decreased GST rates. It is known for its quality European feel and advanced features, and with the rebate, it is now a more affordable option for those looking for a quality SUV.
Here is a complete overview of the pricing of Skoda Kyalq after the GST adjustment:
| Variant | Old Ex-Showroom Price (₹) | New Ex-Showroom Price (₹) | Savings (₹) |
|---|---|---|---|
| Classic | ₹8,25,000 | ₹7,55,000 | ₹70,000 |
| Signature | ₹9,85,000 | ₹9,00,000 | ₹85,000 |
| Signature AT | ₹10,95,000 | ₹10,00,000 | ₹95,000 |
| Signature Plus | ₹11,30,000 | ₹10,34,000 | ₹96,000 |
| Signature Plus AT | ₹12,30,000 | ₹11,34,000 | ₹96,000 |
| Prestige | ₹12,94,000 | ₹11,84,000 | ₹1,10,000 |
| Prestige AT | ₹13,99,000 | ₹12,79,000 | ₹1,20,000 |
Note: Prices are approximate and may vary a bit depending on dealer location and their regional offers.
Main Highlights of Skoda Kyalq (After GST revision):
- Price reduction: The Kyalq receives a price cut of ₹1.19 lakh, which means it’s an even better buy.
- Features: The Kyalq comes with features like an 8-inch touchscreen and reverse parking sensors and is stylish as well.
- Engine options: In both petrol and diesel variants, the engine performance feels pretty premium.
GST Rate Impact on Both Cars
How the New GST Affects Mahindra XUV700
The new GST rate (40%) has brought a real price advantage for Mahindra XUV700 buyers. Now people can experience premium features at a lower price. The price cut will be from ₹ 88,900 to ₹ 1.43 lakh depending on the variant, which makes it a strong contender and potential leader in the premium SUV space. Mahindra XUV700’s chances of getting more sales have increased further due to the GST rate cut
ALSO CHECK: How to Apply for a Fancy Number Plate for Your Car in India
How the New GST Affects Skoda Kyalq
Skoda Kyalq has also benefited a lot from the new GST. Now its price has been reduced to ₹ 1.19 lakh, which makes it quite competitive in both the segments. Now the pricing of Kyalq starts at ₹ 7.5 lakh, and with the company’s cost-cutting measures, it is becoming a serious option for SUV buyers who want an easy entry into the luxury SUV segment. But as the price has come down, the chances of competition getting higher have also increased.
General Trends in Car Price Changes
After the revised GST, the overall auto segment has witnessed a significant price drop ranging from 55% to 40%. Prices have also fallen considerably in premium and luxury SUVs. Further price cuts could occur due to vehicular metrics of manufacturers and future competitive pricing, which will make car ownership more accessible for middle-class consumers.
Mahindra XUV700 vs Skoda Kyalq – Which is Better?
Both the Mahindra XUV700 and Skoda Kyalq offer a lot to their buyers, but which is better is dependent on your requirements and preferences.
| Feature | Mahindra XUV700 | Skoda Kyalq |
|---|---|---|
| Seating Capacity | 7-Seater | 5-Seater |
| Engine Options | Petrol & Diesel | Petrol & Diesel |
| Top Variant | AX7 L | Style Plus |
| Starting Price | ₹13.81 Lakh* | ₹7.5 Lakh* |
| Key Features | ADAS, Panoramic Sunroof, 3D Sound System | 8-inch Touchscreen, Reverse Parking Sensors |
Mahindra XUV700:
- Ideal for anyone looking for a 7-seater vehicle with modern features like ADAS and a panoramic sunroof.
- Convenient for smash-mouthed families of five or six, and useful if people are looking for a more luxurious experience.
Skoda Kyalq:
- Ideal for anyone looking for a luxury SUV with a lower entry price point.
- So ideal for smaller families and would fit anyone looking for a car that is both compact and stylish but that still has plenty of performance and features.
Conclusion
The changes to the GST rate have created a positive effect on the Mahindra XUV700 and Skoda Kyalq which makes both cars better to buy. The Mahindra XUV700 offers a 7-seater experience with some of the best parts, while the Kyalq has some luxury parts at entry-level pricing. Overall, you can’t go wrong with either vehicle, and now is the perfect time to start thinking about your next ride.
If you are a family looking for high-tech modernity and luxury in a 7-person vehicle, the Mahindra XUV700 has to be your choice. However, if you want a bit of a compact luxury SUV with great features on a budget the Skoda is the one for you.
