Lexus India Slashes Prices by Up to Rs. 20.80 Lakh After GST 2.0 Reform

Lexus India has announced a significant price reduction across its entire model range, with savings of up to Rs. 20.80 lakh, following the transformative GST 2.0 reforms introduced by the Government of India. Effective from September 22, 2025, these revised prices are set to make luxury vehicles more accessible, aligning perfectly with the festive season. The move is a direct result of the GST Council’s decision to simplify tax slabs, eliminating the compensation cess and restructuring rates to benefit consumers. From the ES 300h sedan to the flagship LX 500d SUV, every model in Lexus India’s lineup will see a price cut, making this a landmark moment for luxury car buyers in India.

Details of the Price Reductions

The price cuts span across Lexus India’s diverse portfolio, with reductions tailored to each model. The ES 300h sedan now benefits from a price reduction of Rs. 1.47 lakh, making it an even more attractive option in the luxury sedan segment. The NX 350h, a popular compact luxury SUV, sees a price drop of up to Rs. 1.58 lakh. For those eyeing the RX series, the RX 350h is now cheaper by Rs. 2.10 lakh, while the performance-oriented RX 500h enjoys a reduction of Rs. 2.58 lakh. The LM 350h, a premium MPV, has its price slashed by Rs. 5.77 lakh. However, the flagship LX 500d SUV steals the spotlight with the largest reduction of Rs. 20.80 lakh, significantly enhancing its appeal in the luxury SUV market.

These reductions are a direct result of the GST 2.0 reforms, which have streamlined the tax structure for automobiles. Previously, luxury vehicles were subject to a 28% GST rate plus a compensation cess of up to 22%, resulting in an effective tax rate of 43–50%. The new framework introduces a flat 40% GST rate for luxury vehicles, eliminating the cess and reducing the overall tax burden. This change not only lowers ex-showroom prices but also reduces on-road costs, as road taxes are calculated based on the ex-showroom price.

GST 2.0 Reforms: A Game-Changer for the Auto Industry

The GST 2.0 reforms, approved during the 56th GST Council meeting on September 3, 2025, mark a significant overhaul of India’s indirect tax system. Chaired by Union Finance Minister Nirmala Sitharaman, the council introduced a simplified tax structure with two primary slabs—5% and 18%—while luxury and sin goods, including high-end automobiles, now fall under a 40% slab. The elimination of the compensation cess, previously ranging from 1% to 22%, has reduced the effective tax rate on luxury vehicles, enabling manufacturers like Lexus to pass on substantial savings to customers.

This reform is expected to stimulate demand in the automotive sector, particularly during the festive season starting with Navratri on September 22, 2025. The simplified tax structure also reduces compliance complexities for manufacturers, fostering a more transparent business environment. For consumers, the lower prices translate to reduced EMIs and overall ownership costs, making luxury vehicles more attainable for a broader audience.

Lexus India’s Commitment to Customers

Lexus India’s decision to pass on the full benefit of the GST rate reduction reflects its commitment to its philosophy of Omotenashi, which emphasizes personalized and exceptional customer experiences. Hikaru Ikeuchi, President of Lexus India, stated, “We sincerely thank the Government of India for this historic reform and are delighted to extend the full benefit of the GST rate reduction to our valued guests across the country. This initiative enhances accessibility and instils greater confidence in the luxury mobility space.”

Ikeuchi further noted that the timing of the price cuts, coinciding with the festive season, is poised to “spark joy and create new opportunities for our guests to experience the Lexus range of vehicles.” This strategic move not only makes Lexus models more competitive in the luxury segment but also aligns with the brand’s goal of delivering value and innovation to its customers.

Model-Wise Impact of the Price Cuts

The price reductions vary across Lexus India’s lineup, catering to different segments of the luxury market. The ES 300h, known for its refined hybrid powertrain and elegant design, becomes more accessible with a Rs. 1.47 lakh price cut, appealing to buyers seeking a sophisticated sedan. The NX 350h, with its blend of performance and efficiency, sees a reduction of up to Rs. 1.58 lakh, making it a compelling choice in the compact luxury SUV category.

The RX 350h and RX 500h, both popular for their advanced hybrid technology and premium features, benefit from reductions of Rs. 2.10 lakh and Rs. 2.58 lakh, respectively. These savings enhance their value proposition in the mid-size luxury SUV segment. The LM 350h, a luxurious MPV designed for comfort and exclusivity, sees a significant price drop of Rs. 5.77 lakh, broadening its appeal to families and corporate buyers. The flagship LX 500d, a full-size SUV renowned for its off-road capability and opulent interiors, receives the most substantial reduction of Rs. 20.80 lakh, positioning it as a top contender in the high-end SUV market.

Impact on the Luxury Car Market

The price reductions by Lexus India are expected to have a ripple effect on the luxury car market, intensifying competition among brands like Mercedes-Benz, BMW, and Audi, which have also announced price cuts following the GST reforms. The lower tax burden on luxury vehicles, previously taxed at up to 50% due to the compensation cess, makes high-end models more affordable, potentially driving sales during the festive season. This is particularly significant for the Indian market, where luxury car sales have been constrained by high taxation and import duties.

Moreover, the reduction in GST rates on auto parts and components from 28% to 18% could lower production costs, further benefiting manufacturers. While some brands may choose to retain a portion of these savings as margins, Lexus India’s commitment to passing on the full benefit underscores its customer-centric approach. This strategy is likely to strengthen its market position and attract new buyers seeking premium vehicles at more competitive prices.

Timing and Consumer Benefits

The timing of the price reductions, effective from September 22, 2025, aligns with the start of Navratri, a key festive period in India known for high consumer spending. This strategic rollout is expected to boost demand for Lexus vehicles, as buyers take advantage of the lower prices to purchase their dream cars. The festive season, which includes Diwali in October 2025, typically sees a surge in automobile sales, and Lexus India’s price cuts position the brand to capitalize on this trend.

For consumers, the benefits extend beyond ex-showroom price reductions. Lower ex-showroom prices translate to reduced road taxes and registration fees, further lowering the on-road cost of Lexus vehicles. Additionally, buyers financing their purchases can expect lower EMIs, making luxury car ownership more affordable. This combination of factors makes September 22, 2025, an ideal time for prospective buyers to consider a Lexus vehicle.

What This Means for Buyers

For those in the market for a luxury vehicle, Lexus India’s price reductions present a rare opportunity to own a premium car at a significantly lower cost. Whether you’re considering the sleek ES 300h sedan, the versatile NX 350h, or the commanding LX 500d SUV, the savings make these models more accessible than ever. Buyers are advised to wait until September 22, 2025, when the revised prices take effect, to maximize their savings.

To make an informed decision, potential buyers should visit Lexus India dealerships or check the official website for updated pricing and variant details once the new rates are implemented. With the festive season approaching, this is an opportune moment to explore Lexus’s range of hybrid and luxury vehicles, known for their cutting-edge technology, comfort, and performance.