Bicycles, regarded as an essential means of transport and recreation, are subject to GST. To improve affordability and promote sustainable mobility, the GST Council has recently rationalised the tax structure for bicycles and their accessories. The previous multi-tiered system has been replaced with a simplified, lower uniform rate for most bicycle-related products.
New GST rates and HSN Code for Bicycles
Recent GST reforms have brought significant changes to the taxation of bicycles, resulting in a simplified structure and more favourable GST rates across most categories.
The most notable revision is the reduction in GST on non-motorised bicycles from 12% to a more affordable 5%.
Category |
HSN Code |
Previous GST Rate |
Revised GST Rate (Effective 22 September 2025) |
Non-Motorised Bicycles |
8712 |
12% |
5% |
Bicycle Parts and Accessories |
8714 |
12% |
12% |
Electric Bicycles |
8711 |
5% or 12% |
5% |
Carriages for Disabled Persons |
8713 |
5% |
5% |
Accurate classification under the appropriate HSN Code is essential for correct taxation and compliance with GST regulations.
How is GST applicable to bicycles?
GST treatment for bicycles has been simplified following recent rate revisions:
- Non-motorised Bicycles: Standard bicycles, including non-motorised cycles and delivery tricycles, are now subject to a reduced 5% GST rate under HSN code 8712.
- Electric Bicycles: In support of e-mobility, all electric bicycles and e-cycles—regardless of specifications or power output—are now uniformly taxed at a concessional 5% GST under HSN code 8711. The earlier ambiguity, where higher-spec models attracted a 12% rate, has been resolved.
- Bicycle Parts and Accessories: Components such as chains, pedals, gears, baskets, and bells remain taxed at the standard 12% GST under HSN code 8714.
- Carriages for the Disabled: Specially designed carriages for persons with physical disabilities continue to attract a concessional 5% GST under HSN code 8713.
This streamlined structure ensures greater clarity and affordability across the bicycle sector while promoting inclusive and sustainable mobility.
How is GST calculated on bicycles?
GST is calculated based on the transaction value of the bicycle, which includes its base price.
The formula for calculation is:
GST Amount = Cost Price × GST Rate
Example:
If the cost of a standard bicycle is Rs. 5,000 and the applicable GST rate is 5%:
· GST = Rs. 5,000 × 5% = Rs. 250
· Total Price = Rs. 5,000 + Rs. 250 = Rs. 5,250
Registered businesses are eligible to claim Input Tax Credit (ITC) on GST paid for eligible purchases.
For accurate calculations, it is advisable to use a trusted GST calculator tailored to your transaction needs.
GST on non-motorised bicycles
The GST rate for standard, non-motorised bicycles (HSN Code 8712) has been lowered to 5%, down from the earlier 12%. This reduction aims to make cycling more affordable and accessible for everyday consumers, while also promoting public health and environmental sustainability.
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 (e-bikes) fall under HSN Code 8711 and are subject to a uniform GST rate of 5%, irrespective of their features or power capacity. This reduced rate for all electric vehicles, including e-bikes, has been deliberately set to promote the adoption of environmentally friendly transport options. Previous information suggesting that premium e-bikes attract a 12% GST is now outdated.
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
The GST rate for most bicycle and motorcycle parts and accessories (HSN Code 8714), including items like chains, pedals, and tyres, has been reduced to 5% from the previous 12%. This cut is intended to make maintenance and repairs more affordable.
Carriages designed for differently-abled persons, along with their parts, may attract either a nil rate or a concessional GST rate of 5%, depending on their classification, to promote accessibility.
Conclusion
A clear understanding of the GST framework for cycles is crucial for both consumers and businesses. Recent GST rate rationalisations have lowered costs for standard bicycles and simplified the tax regime for electric cycles. Staying informed, whether you’re buying or selling, enables smarter financial choices and ensures compliance.
For businesses aiming to expand or invest in stock, a business loan can provide the necessary support to grow while maintaining GST compliance.
