Will GST 2.0 Make Your Next Bike Cheaper or Costlier?

The Indian government is planning a big change in Goods and Services Tax (GST) rates for the automobile sector. This proposal could make smaller bikes and scooters more affordable, while larger motorcycles may become more expensive.

The plan aims to simplify the tax structure and is likely to be discussed in the upcoming GST Council meeting. If approved, this move will affect both buyers and manufacturers, especially those selling motorcycles above 350cc engine capacity. Let’s understand what this means for you.

The Proposed GST Change

Right now, all two-wheelers attract 28% GST. Bikes above 350cc pay an extra 3% cess, taking the total to about 31%. Smaller bikes and scooters below 350cc only pay 28% GST without cess. This creates confusion, as different bikes fall into slightly different tax categories.

The finance ministry wants to simplify the structure. Small bikes and scooters below 350cc could see GST reduced to 18%. Big motorcycles above 350cc may move into a new 40% GST slab. The proposal aims to remove the old 12% and 28% slabs. Instead, only 5%, 18%, and 40% slabs will remain for most goods and services.

How Buyers Will Be Affected

If approved, small two-wheelers will get cheaper. This will benefit millions of buyers in the commuter segment. Basic bikes and scooters may see prices drop by a few thousand rupees. On the other hand, large motorcycles above 350cc will become more expensive. This may not stop big bike enthusiasts, but it could affect budget-focused buyers.

Impact on Popular Brands

Royal Enfield, Honda, Jawa, and Yezdi sell many bikes just below 350cc. These bikes may benefit as they will come under the 18% GST slab. However, Royal Enfield models in the 450cc to 650cc range will get costlier. Bajaj-KTM bikes in the 373cc to 398cc range will also face higher taxes. Triumph’s 400cc models built with Bajaj will move into the 40% bracket too.

What Happens Next?

The GST Council is expected to discuss this proposal in September. If approved, the new rates could be implemented soon after. Buyers of smaller bikes can look forward to price cuts. Big bike lovers may have to pay more for their dream machines. For now, both buyers and manufacturers are waiting for the final decision.

Before you go, don’t forget to check out the Top 5 Bikes in India That Come With Tall Windscreens.