In India, the Goods and Services Tax (GST) on motorcycles varies according to engine capacity. Bikes with engines below 350cc will attract a GST rate of 18%, reduced from the earlier 28%. Motorcycles with engines above 350cc will face a 40% GST rate. These revised rates will take effect from September 22, 2025. This tiered structure is designed to balance tax revenue while encouraging the adoption of smaller, more fuel-efficient two-wheelers. Understanding these rates is essential when assessing the total cost of ownership.
What is GST on bikes and two-wheelers in India 2025?
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 2025
Here are the revised bike GST rates for 2025 in India. These revised rates will be effective from September 22, 2025. 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.
Category | GST rate |
GST on bikes with engine capacity greater than 350cc | 40% |
GST on bikes with engine capacity of less than 350cc | 18% |
GST for two-wheeler insurance policy | 18% |
GST on clutch cable, gauge oil level, and brake pads | 28% |
GST on battery charging (EV), consumables, and lubricants | 18% |
GST on electric bikes | 5% |
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 will be taxed at a rate of 40%, while those with an engine capacity of less than 350cc will be taxed at 18%. These revised rates will be applicable from September 22, 2025.
GST on electric bike purchases
In recent years, customers have become more environmentally conscious, primarily due to the rising level of air pollution in the country. Additionally, the unabated rise in fuel prices has pushed customers to opt for electric two-wheelers, while government subsidies through the FAME II scheme act as an added incentive. Even the GST rates applicable on electric bikes are nominal, currently standing at just 5% remains unchanged even after revised GST rates that are applicable from September 22, 2025.
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.
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 popular bike models
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 starting ex-showroom price is around Rs. 59,998 in Delhi. Considering it falls under 350 cc, there will be an impact in the overall on-road price of this bike.
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. 79,426 in Delhi.
Bajaj Platina
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 150
Another model that has benefitted from the implementation of GST on bikes is the highly sought-after Bajaj Pulsar 150. The 150 ES variant is available for around Rs. 1,17,203 (ex-showroom price in Delhi).
Buy a new bike on EMIs with a Bajaj Finance 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 Finance 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 6 months to 84 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 Finance Two-wheeler Loan, and bring home your dream bike.
