Goods and Services Tax (GST) is a comprehensive, indirect tax levied on the manufacture, sale, and consumption of goods and services across India. Bicycles, as an essential mode of transport and recreation, are also included under the GST regime.
The applicable GST on bicycles depends on their type—whether they are standard non-motorised cycles, electric bicycles, or bicycle parts and accessories. Non-motorised bicycles are generally taxed at 12%, while electric cycles and certain components may fall under different slabs depending on their classification.
HSN code and GST rates for cycle
The GST applicable to bicycles and their parts is determined based on their HSN code classification. Here's a table outlining the key categories:
| HSN Code | Description | GST rates |
|---|---|---|
| 8712 | Bicycles and other cycles (including delivery tricycles), not motorised | 12% |
| 8714 | Parts and accessories of bicycles and other cycles | 12% |
| 8711 | Electric bicycles (classified under electric motorcycles/scooters) | 5% or 12% |
Proper classification using the correct HSN Code ensures accurate taxation and legal compliance.
How is GST applicable to cycle?
GST applicability on bicycles is influenced by their purpose, classification, and specifications. Here's how it works:
- Non-motorised bicycles are taxed at 12%.
- Parts and accessories of bicycles are also taxed at 12%.
- Electric bicycles are typically taxed at 5%, though high-spec models may fall under 12%.
- Cycles designed for physically disabled individuals may receive exemptions or concessional rates.
This approach supports sustainable transportation and promotes inclusive mobility through structured tax benefits.
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How is GST calculated on cycle?
GST is calculated on the transaction value of the cycle, which includes the base price before tax.
- Formula: GST amount = (Cost price × GST rate)
- For example, if the price of a bicycle is Rs. 5,000 and the GST rate is 12%,
GST = Rs. 5,000 × 12% = Rs. 600
Total Price = Rs. 5,600 - Input Tax Credit (ITC) can be claimed by registered dealers on applicable purchases.
Use a reliable GST calculator to accurately compute GST for your transactions.
GST on purchase of a bicycle
When purchasing a standard, non-motorised bicycle:
- GST rate: 12%
- The price at retail outlets should include GST.
- Retailers must apply the correct HSN code and maintain compliance with GST filing norms.
Standardising GST on bicycles helps ensure uniform pricing and reduces compliance risk for sellers.
GST on purchase of an electric bicycle
Electric bicycles are considered green alternatives and are taxed with this goal in mind:
- GST rate: Generally 5% to promote adoption of electric mobility.
- Premium e-bikes with advanced features may attract 12% GST.
- Electric cycles are classified based on power output and specifications.
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Implications of GST rates and HSN codes on cycle
Understanding GST rates and HSN classifications is crucial for both compliance and cost efficiency:
- Correct HSN coding ensures the proper application of tax rates and smooth filing.
- Favorable GST rates for bicycles promote affordable, eco-friendly transportation.
- It also aids in reducing disputes, penalties, and delays in the supply chain.
Businesses must ensure they stay updated on HSN amendments and rate notifications to remain compliant.
GST on parts and accessories of bicycles and motorcycles and for carriages for physical disability
- Cycle and motorcycle parts such as chains, pedals, tyres, and gears are taxed at 12%.
- Accessories like baskets, bells, and reflectors are also generally under the 12% slab.
- Carriages and modifications for differently-abled persons may fall under reduced or nil GST, depending on classification.
This structure supports accessibility and enhances the affordability of cycle maintenance and modifications.
Conclusion
Understanding the GST structure for cycles is essential for both consumers and businesses. From purchasing a simple cycle to dealing with electric models or accessories, clarity in GST rates and HSN classification plays a crucial role. Whether you're a buyer or a seller, staying informed ensures smarter financial decisions.
For businesses looking to scale operations or invest in inventory, a business loan can help you grow while staying GST-compliant.
