The latest GST reform on two-wheelers has created a big shift in the Indian motorcycle and scooter market. Starting September 22, 2025, the GST rates for bikes and scooters will be split into two clear slabs – a move that directly impacts both commuter two-wheelers and premium motorcycles.
Key Highlights of New GST Rates on Two-Wheelers
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18% GST on scooters and bikes up to 350cc (down from 28%)
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40% GST on motorcycles above 350cc (up from 31%)
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Cess removed – only two tax slabs now apply
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New rates effective September 22, 2025, just before the festive season
Majority of Two-Wheelers Become Cheaper
Nearly 98% of the Indian two-wheeler market falls under the 350cc segment. These bikes and scooters are now taxed at 18% instead of 28%, making them 10% cheaper. This is a huge relief for everyday commuters and first-time buyers, especially during the festive buying season.
Bikes and Scooters That Get Cheaper
Some of the most popular models benefitting from the GST cut include:
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Hero Splendor series
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Honda Shine (100cc & 125cc)
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Bajaj Pulsar range (125cc–250cc)
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Yamaha FZ series
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TVS Apache range (160cc–310cc)
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Honda Activa, TVS Jupiter, Suzuki Access scooters
Even premium commuter bikes like the Royal Enfield Classic 350, Hunter 350, Meteor 350, Bullet 350, Honda CB350 series, and Jawa-Yezdi motorcycles fall just under the 350cc mark – ensuring they too benefit from the lower tax rate. Buyers can expect price cuts of several thousand rupees depending on the model.
Big Bikes Become Costlier Under 40% GST
On the other hand, motorcycles with engine capacities above 350cc are now treated as luxury or sin goods, attracting a steep 40% GST. This is a direct 9% increase from the earlier 31% rate (28% GST + 3% cess).
Motorcycles That Get More Expensive
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Royal Enfield Himalayan 450, Interceptor 650, Continental GT 650
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Bajaj Dominar 400, Pulsar NS400Z
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KTM 390 Duke, 390 Adventure
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Triumph Speed 400 & Scrambler 400X
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Imported models from Ducati, Aprilia, BMW, Harley-Davidson, Kawasaki, Suzuki, Honda, and Indian Motorcycles
While these premium bikes represent a small share of overall sales, the impact will be significant for enthusiasts. The price hikes could discourage demand unless brands absorb part of the increase.
Why the Removal of Cess Matters
Previously, high-capacity motorcycles attracted 28% GST plus a 3% cess, bringing the effective tax to 31%. With the cess scrapped, the structure is simplified into:
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18% for ≤350cc bikes
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40% for >350cc bikes
This creates a clear tax divide, but also places big bikes in the luxury category, reflecting the government’s stance on premium motorcycle ownership.
What This Means for Buyers
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Everyday buyers win big: Entry-level and commuter two-wheelers are now more affordable, boosting accessibility and demand.
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Premium buyers lose out: Enthusiasts looking for high-performance bikes will face steeper costs.
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Festive boost expected: The timing of this reform is likely to fuel sales of scooters and commuter motorcycles during the festive season.
Car Quest Says
This GST reform for two-wheelers has created a clear divide in the Indian market. While mass-market scooters and commuter bikes become cheaper, premium motorcycles now face a luxury tax burden. The move supports the broader consumer base but leaves enthusiasts disappointed.
The upcoming festive season could see record demand in the commuter segment, while big bike sales might slow down as a result of the higher tax rate.
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