GST Reform: Bikes up to 350cc to Attract 18% GST, Big Bikes Above 350cc to Face 40% GST

India’s GST Council has overhauled the tax structure for two-wheelers as part of its latest reform rollout, effective from September 22, 2025. 

Under the new slabs, motorcycles with engine capacities up to and including 350cc will now attract 18% GST, reduced from the previous 28%. In contrast, premium motorcycles above 350cc will face a higher 40% GST rate, up from the earlier effective 31% (28% plus 3% cess).

New GST Rates: 18% for ≤350cc, 40% for >350cc Bikes

The new GST regime introduces a clear split: mass-market and commuter bikes now benefit from a 10% tax cut, while big bikes become more expensive. The 18% slab applies to the most popular models from Hero MotoCorp, Bajaj Auto, Honda, TVS and Royal Enfield’s 350cc line-up. This change is aimed at making two-wheeler mobility more accessible for everyday users.

On the flip side, high-performance and larger-capacity models from brands like KTM, Royal Enfield (440/450/650), Triumph and Harley-Davidson will now be taxed at 40%, making them significantly costlier to own.

Market Impact on Buyers and Brands

Mass-market players are the key beneficiaries, with potential for lower ex-showroom prices and festive-season offers. Models like the Splendour, Pulsar, Activa, Apache and Classic 350 could see increased footfall at dealerships. For mid-to-high-end bikes, higher taxes may dampen demand or shift buyer preferences below the 350cc threshold.

Read More: GST Reforms 2.0: Why Have Bidis Attracted an 18% Tax, Unlike Other Tobacco Products?

Implementation Timeline and Practical Considerations

The updated GST structure takes effect from September 22, 2025. Dealers may recalibrate prices depending on inventory billing cycles. While GST changes apply nationally, actual on-road prices may vary due to state-specific registration fees, insurance, and logistics costs. The reform aims to support affordable mobility while discouraging luxury two-wheeler consumption through steeper taxation.

Conclusion

India’s new GST slabs bring relief for buyers of ≤350cc bikes, reducing their tax burden and likely enhancing affordability during the festive period. However, the 40% rate for big bikes signals a clear policy tilt toward favouring essential mobility over performance or luxury segments.

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