How does India’s new GST policy on two-wheelers affect you? It depends on what you ride. The government’s new tax structure, effective from September 22, 2025, makes daily commutes more affordable but hits premium bike lovers with a hefty price increase.
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The Winners: Commuters & City Riders
If you’re an office-goer or primarily use a two-wheeler for city errands, you’re in luck. The GST on bikes and scooters under 350cc has been slashed from 28% to just 18%. This translates to real savings. On a ₹1 lakh bike, you could save ₹10,000 to ₹12,000 on models like the Honda Activa 125 and TVS Jupiter. Even three-wheelers used for logistics now benefit from this lower tax slab, a win for gig workers and commercial fleets.
The Losers: Premium Bike Enthusiasts
If you’ve been eyeing a high-performance machine, you might have to rethink your budget. Bikes with engines over 350cc now face a steep 40% GST, a significant jump from the previous 31% rate. This new “luxury” bracket will make models like the Royal Enfield Himalayan 450, KTM Duke 390, and Triumph Speed 400 considerably more expensive. For instance, a would-be buyer of a Royal Enfield Interceptor 650 will see a substantial price hike, potentially pushing it out of reach for many.
The Unaffected: EV Fans
Electric two-wheelers continue to enjoy the lowest tax rate. The GST for models like the Ola Electric, Ather, TVS iQube, and Bajaj Chetak Electric remains unchanged at just 5%. With EVs already offering lower running and maintenance costs, they now hold an even clearer financial advantage for urban riders focused on value and eco-friendliness.
In short, the new GST policy creates a sweet spot for budget-conscious buyers, especially with Diwali sales around the corner. But for those dreaming of a big bike, this change may just be the push needed to consider an electric alternative.
