GST Rate Cut: Scooters, Bikes Get Cheaper, Big Bikes To Cost More

Quick News Highlights:

• Bikes up to 350cc now taxed at 18% instead of 28%

• Bikes above 350cc will now have 40% GSTfrom 31%

• New rates apply from September 22, just before the festive season.

The GST on smaller bikes and scooters with engines up to 350cc has moved into a new lower 18% slab – which should mean all entry-level and commuter bikes will get cheaper. While bigger motorcycles with engines above 350cc now fall into a higher 40% bracket. This would include all your performance bikes like the KTM 390 Duke, 390 Adventure, Aprilia RS 457, Triumph 400cc bikes, and more. The smaller two-wheelers are now taxed 10% less while the larger ones will command 9% more than before.

No More Cess

One important change is that cess has been removed. Earlier, big motorcycles carried an extra cess of 3% on top of the 28% GST, making the effective tax 31%. Going forward, there are only 2 clear slabs: 18% for bikes up to 350cc and 40% for those above. There’s no additional cess over and above this. 

Relief For The Majority

The reduction in tax will help almost the entire Indian two-wheeler market as nearly 98% of bikes and scooters sold in the country fall below 350cc. This means commuter bikes will see lower prices, making these two-wheelers easier to buy ahead of the festive season. 

Bikes That Get Cheaper

Popular bikes in the 100-350cc class such as the Hero Splendor, Honda Shine (100 & 125), Bajaj Pulsar range (125-250cc), Yamaha FZ models, TVS Apache series (160-310cc) and scooters like Honda Activa, TVS Jupiter, Suzuki Access all move into the 18% bracket. Here's a list of all bikes that will be cheaper.

Even bikes from Jawa-Yezdi, Honda’s CB350 line-up, and Royal Enfield’s J-platform based bikes like the Classic 350, Hunter 350, Meteor 350, Bullet 350 will benefit from this, with price cuts that could be in the range of several thousand rupees. All these bikes’ engine capacity is slightly lower than 350cc, which has helped them to get in the lower tax slab. 

Bigger Bikes Get Costlier

The story is very different for motorcycles above 350cc, these are now treated like ‘luxury or sin’ goods, facing a heavy 40% tax, making them more expensive than before. Here is a list of all popular bikes that will get more expensive. 

Bajaj will be the highest hit by this new tax reform as they have the Pulsar NS400Z and the Dominar 400, 390 range of KTM bikes, and even the made-in-India 400cc Triumph bikes fall in the 350cc+ category.

Imported Bikes

Foreign brands and imported bikes on the higher-end of the price bracket from European, American, and Japanese brands like Ducati, Aprilia, BMW, Triumph, Kawasaki, Suzuki, Honda, Harley-Davidson, Indian, and more will also now get taxed at 40%, instead of 31%. That said, these make up a very small percentage of bikes sold in India. 

What It Means For Buyers

For the everyday buyer, this reform is positive. Most scooters and commuter bikes are now cheaper, which should push up demand. But for enthusiasts looking at bigger machines, the hike is substantial and will pinch the pocket. Whether companies absorb some of the increase or pass it on entirely remains to be seen. 

BikeDekho Says

This GST reform creates a clear divide in the market. Smaller two-wheelers become more affordable, supporting the mass market. Higher capacity bikes will become costlier, underlining the government’s intent to treat them as luxury products which has left the enthusiasts a little disappointed. The timing, just before the festive season, means the industry could see strong demand at the lower-end even as premium bike sales will take a hit.

Industry Reactions

TVS

"We applaud the government for taking consistent steps towards boosting growth and enhancing the growing middle class’s spending power - all towards realising PM’s vision of Viksit Bharat 2047. The GST tax cuts is a major move by the government to further turbocharge growth. It will significantly boost consumption across segments of the society. For our industry especially, it’s a welcome move as it will help 2Ws become more accessible and also help those looking to upgrade." - Sudarshan Venu, Chairman, TVS Motor Company

Jawa, Yezdi, and BSA

“The government’s bold and timely GST reforms will bring a tectonic shift for the greater good, echoing the historic transition from 2-stroke to 4-stroke engines. Classic Legends welcomes the GST rationalisation, especially the reduced rate of 18% for under-350cc motorcycles, which covers our 293cc and 334cc Jawa and Yezdi performance classics.

While it raises the tax burden for higher cc motorcycles such as our 652cc BSA Gold Star, we accept it as the hallmark of progressive taxation. The trade-off makes mid-segment bikes accessible to a larger rider community -- a win for India’s motorcycling culture. We thank the Hon’ble Finance Minister for the fresh impetus for demand that will energise the economy amid a slowdown and global tariff wars.

Decades ago, our brands faded due to a policy shift; today, policy foresight is helping restore their legendary stature. We will pass on 100% of the GST benefit to our customers. Coinciding with the festive season, we are telling young Indians who aspire to own a true iconic performance motorcycle: Your time is now.” - Anupam Thareja, MD and Co-founder, Classic Legends,