GST Cut to Make Small Bikes Cheaper, Big Bikes Costlier

India’s Union Minister has announced a big change in GST rates for two-wheelers. This decision will affect motorcycle and scooter buyers across the country. Smaller two-wheelers, which make up most of the market, will soon become cheaper.

However, bigger motorcycles will now get more expensive under the new “sin tax.” The new rules will come into effect from 22 September. While buyers of commuter bikes can celebrate, enthusiasts of premium bikes may have to spend more. Let’s break down what this GST change means for you.

What the New GST Slabs Say

At present, all two-wheelers attract 28 per cent GST. Larger bikes above 350cc also pay an extra 3 per cent cess. This brings their total tax to around 31 per cent.  Under the new GST slabs, things are changing:

• Bikes and scooters below 350cc will now attract 18 per cent GST.
• Bikes above 350cc will fall under a 40 per cent GST slab.

The government has called this extra burden on big bikes a “sin tax.” The move aims to simplify the tax structure while encouraging affordable mobility for the masses.

Apart from this, our honourable Prime Minister Narendra Modi stated, “The next generation of GST reforms are a gift for every Indian this Diwali. Taxes for the general public will be reduced substantially. Our MSMEs & small entrepreneurs will get huge benefit. Everyday items will become cheaper and this will also give a new boost to the economy”

Relief for Small Bike Buyers

The biggest winners of this decision are buyers of small-capacity motorcycles and scooters. Almost 98 per cent of India’s two-wheeler market falls under the sub-350cc category. Popular brands like Hero, Honda, TVS, Bajaj, and Suzuki will benefit from this cut.

For example, commuter bikes like the Splendor, Pulsar 150, Activa, and TVS Jupiter will see their prices reduced. Buyers can expect savings of a few thousand rupees, depending on the model. This will be a big relief for middle-class families and daily commuters.

Impact on Premium Motorcycle Market

The bad news is for premium bike enthusiasts. Big bikes above 350cc, like Royal Enfield, KTM, Jawa, Yezdi, and Triumph 400 models, will now attract 40 per cent GST.

This is a sharp jump from the earlier 31 per cent tax. For example, popular bikes in the Royal Enfield 450cc and 650cc range will become significantly more expensive. Bajaj-KTM models in the 373cc to 398cc range and Triumph’s new 400cc bikes will also be impacted.

The new GST slabs will officially be applied from 22 September. Until then, many buyers are likely to wait before making a purchase. Dealers expect September sales to remain weak as customers delay buying decisions for better deals.

Before you go, don’t forget to check out the Bobber Bikes That Make Daily Rides Comfortable.