In India, the Goods and Services Tax (GST) on motorcycles varies based on engine capacity. Currently, bikes with engine capacities below 350cc are taxed at a 28% GST rate. For those exceeding 350cc, a compensatory cess of 3% raises the total tax to 31%. This tiered structure aims to balance tax revenue while promoting the use of smaller, more fuel-efficient two-wheelers. Understanding these rates is crucial for buyers when considering the overall cost of ownership.

About GST on two-wheelers

The GST on bikes primarily depends on the two-wheeler’s engine capacity, and this applies to new and second-hand bikes. Furthermore, GST applies to non-electric and electric two-wheelers. Let us take a closer look at bikes’ GST rates and how GST has impacted the two-wheeler industry.

Current bike GST rates for 2024

Here are the current bike GST rates for 2024 in India. This two-wheeler GST tax rate list will help you understand the implications of GST on two-wheelers, allowing you to make an informed decision.

GST on bike purchases

The implementation of the Goods and Services Tax (GST) in 2017 has considerably reduced the tax burden on bikes – and two-wheelers – in India. This has allowed the manufacturers to pass down the tax benefits to the customers by way of offers and discounts on bikes. Under GST, bikes with an engine displacement of more than 350cc are taxed at a rate of 31%, while those with an engine capacity of less than 350cc are taxed at 28%.

However, if you opt for luxury or high-end bikes, you will have to bear additional cesses under GST, which can further increase their cost.

GST on electric bike purchases

The rise of electric bikes has transformed the two-wheeler market, especially as fuel prices continue to climb. Many consumers are now considering electric options for their daily commutes. To promote this shift, the GST rate on electric bikes has been significantly reduced to just 5%, down from the previous 12%. This lower tax rate makes electric two-wheelers more affordable, encouraging both buyers and manufacturers to embrace this eco-friendly alternative. In addition to the reduced GST, electric bikes offer benefits such as lower maintenance costs and environmental sustainability. With GST rates for other two-wheelers ranging from 18% to 31%, the incentives for switching to electric are clear and compelling.

GST on insurance policies of two-wheelers

According to the current taxation norms in the country, the GST on two-wheeler and bike insurance policies is applicable at 18%. That is, while opting for a bike insurance policy, you have to pay a GST of 18% on the insurance policy premium. The erstwhile tax structure mandated the policyholder to pay taxes of up to 15%. Therefore, the GST applicable on comprehensive and third-party bike insurance has increased after the implementation of GST. Understanding the GST on bikes is essential for budgeting insurance costs effectively.

Impact of GST on bike purchases

The bike GST rate led to a reduction in prices vis-a-vis the previous tax structure for most bike models, making them more affordable. Concomitantly, the demand for two-wheelers has increased, boosting the sales figures. Moreover, GST on bikes has streamlined the tax process and reduced the knock-on effect of taxes. Thus, the new tax structure has altered the market dynamics of the bike industry.

The government is also contemplating further reducing the GST to help boost the bike sales figures in the country.

Impact of GST on top-selling bikes

Let us now look at the impact of GST on a few of the top-selling bikes in India.

Hero HF Deluxe

One of the best commuter bikes in the entry-level segment, the Hero HF Deluxe has been a chart-topper since its introduction to the Indian market. Before the implementation of GST, the bike’s ex-showroom price was around Rs. 60,260 in Delhi for the Hero HF Deluxe Kick Start Drum Alloy Wheel (Heavy Grey With Black) model. The bike has received a few upgrades over the years, and today, its on-road price is around Rs. 71,792 (Delhi) on Bajaj Mall.

Hero Splendor Plus

Similar to HF Deluxe, Hero Splendor+ is popular among commuters in the affordable two-wheeler segment. The GST on this bike translates to a slight reduction in its price tag compared to the previous tax structure. The ex-showroom price of the Hero Splendor+ series starts from Rs. 75,441 in Delhi.

Honda CB Shine

The Honda CB Shine is yet another entry-level commuter whose price tag (ex-showroom) has been reduced with the introduction of GST. The bike runs on a 125cc engine and boasts an ARAI mileage of 55 kmpl.

Bajaj Platina

Bajaj Platina’s ex-showroom price has decreased by 3-5% after the introduction of GST. The stylish commuter offers superior mileage owing to its powerful DTS-i engine. Moreover, thanks to the advanced Comfortec technology that effectively deals with bad, uneven roads, you can enjoy comfortable, smooth rides.

Bajaj Pulsar

Another model that has benefitted from the implementation of GST on bikes is the highly sought-after Bajaj Pulsar. The 150 ES variant is available for around Rs. 1.77 lakh (on-road price in Delhi) on Bajaj Mall.

Buy a new bike on EMIs with a Bajaj Finserv Two-wheeler Loan

If you are concerned about the cost of a new bike, which includes the bike GST rates, then you can own your favourite bike without depleting your savings. Check out the Bajaj Finserv Two-wheeler Loan. The two-wheeler loan from Bajaj Finance provides up to 100% financing of the bike’s on-road price. Thus, you can easily purchase your favourite model without any financial constraints and repay the amount in EMIs over 12 months to 72 months. To avail our two-wheeler loan, you can head to Bajaj Mall and book your favourite bike. Afterwards, visit your nearest partner showroom, avail of the Bajaj Finserv Two-wheeler Loan, and bring home your dream bike.