Bikes Above 350 cc May Face 40% GST – Premium Two-Wheelers to Get Costlier

India’s GST Council is considering a major restructuring of tax slabs for two-wheelers. Under the proposed changes, motorcycles with engine capacities above 350 cc would be taxed at a steep 40% GST, up from the current effective rate of approximately 31% (28% GST + 3% cess). Meanwhile, bikes and scooters under 350 cc could benefit from a reduced 18% rate, down from 28%. The decision is expected to be taken at the upcoming GST Council meeting scheduled for September 3–4, 2025.

Engine & Performance

Currently, two-wheelers above 350 cc incur a 31% tax burden, combining 28% GST with a 3% cess. Should the 40% slab materialize, manufacturers are likely to pass on the extra cost to consumers. Popular models such as the Royal Enfield Himalayan 450, Classic 650, KTM 390 series, Honda H’ness, Triumph 400s, and Harley-Hero variants would all be impacted.

Chassis & Handling

Though the proposed tax change doesn’t alter physical specs, it may influence consumer behavior. Bikes under 350 cc that offer nimble frames and commuter-friendly dynamics could see heightened demand if prices drop under the new 18% slab.

Technology & Features

Premium bikes typically offer advanced tech—ride modes, ABS, TFT displays—but under the new proposal, such features could become costlier. Conversely, mid-capacity models might become more competitive buyers thanks to the tax reduction.

Conclusion

The proposed GST overhaul could herald a clear divide in India’s motorcycle market. Sub-350 cc bikes stand to gain affordability and stronger demand, potentially becoming the segment of choice for everyday riders. Meanwhile, premium motorcycles above 350 cc — known for performance, comfort, and modern features — may see their appeal muted by steep pricing. Pending decisions from the September 3–4 GST Council meet, buyers and manufacturers alike should brace for a tax-driven shift in market dynamics.

Premium bikes may soon become status-luxuries, while everyday riders could benefit from more accessible pricing.