At the Melbourne Cricket Ground, Smith scored a career-best 192 runs (305 balls, 15 fours, 2 fours) as the visitors let slip the pressure built on day one and completely surrendered to the batting display.
For India, R Ashwin (3-134) was the best bowler on display, bowling with control throughout the innings. Mohammad Shami (4-138) took the most wickets, but he was also the worst bowler on display, smacked for 23 fours, 13 more than any other bowler.
Ishant Sharma (0-104) and Umesh Yadav (3-130) were unimpressive on this day with Murali Vijay (0-14) being the only other bowler used in this innings.
Post-lunch, Smith looked to get some quick runs with Ryan Harris (74 runs, 88 balls, 8 fours, 1 six). India, meanwhile, merely waited for things to happen, almost reluctant to get the batsmen out.
The latter made good use of the same and scored his third Test half-century, getting there off 75 balls. With Smith, he put on 106 runs for the 8th wicket as the visitors continued to bleed runs.
All their front-line bowlers conceded more than 100 runs, a fact cheered by much gusto by the MCG crowd. Smith meanwhile continued to motor along, getting to the 150-run mark for the second time in this series, reaching there in the 133rd over.
He stepped up the run-rate thereafter, scoring his next 42 runs off only 32 balls.
Harris was out LBW to Ashwin in the 136th over of the innings and thereafter, Smith added a quick-fire 48 runs for the ninth wicket with Nathan Lyon (11) who threw his bat around.
They were then both bowled by Shami in successive overs, 142nd and 144th, as the hapless Indian bowling and fielding effort on day two came to an end. Josh Hazlewood (0) was the unbeaten batsman.
Earlier, the hosts broke through India’s resistance on day one and marched ahead in the morning session as Smith struck his third successive hundred of this Test series.
The day started with Australia placed at 259/5 overnight, with Smith and Brad Haddin (55 runs, 84 balls, 7 fours, 1 six).
The Indian bowlers would have looked to maintain their consistency from but they erred on their line and length, resorting to short-ball tactic almost immediately. Haddin made full use of the same as he raced to his half-century off 75 balls, scoring 29 runs off 25 balls in the morning’s play.
The score also sped as a result and the first nine overs cost India 52 runs. The 50-run partnership for the sixth wicket came up in the 92nd over and then Haddin’s 18th Test fifty came up three overs later.
At the other end, Smith remained solid as ever, bringing up 2000 career runs playing in his 25th Test. A little later, Australia crossed the 300-mark in the 97th over and three overs later their 100-run partnership came up.
Following up his scores of 162 not out at Adelaide and 133 at Brisbane, Smith brought up his seventh Test hundred in the 101st over of the innings then.
He got to the milestone off 191 balls, and in doing so, emulated Vijay Hazare, Jackie McGlew, Sunil Gavaskar and Alastair Cook as the ones to score hundreds in their first two Tests as captain.
In that same over, against the run of play, Haddin was out caught behind edging a delivery he looked to leave off Shami. But this didn’t bring any respite to the Indians as Mitchell Johnson (28 runs, 37 balls, 5 fours) came to the crease.
Australia maintained a run-rate of more than five-per-over through this morning session, scoring 130 runs in just 25 overs.
Ashwin was introduced late into the attack, and just as on day one, he was able to apply some brakes. He also managed to get Johnson out stumped in the 112th over but Harris stayed with his skipper until the break.
Australia had won the first Test in Adelaide by 48-runs and then the second Test in Brisbane by four-wickets to take a 2-0 lead in the four-match series.