GST on Two-Wheelers 2025 – Full Update
| Category | GST Before | GST Now | Example Bike | Price Before | Price Now |
|---|---|---|---|---|---|
| Scooters / Bikes under 350 cc | 28% | 18% | Honda Activa 125 | ₹1,00,000 | ₹90,000 |
| Premium Bikes above 350 cc | 31% (28% GST + 3% cess) | 40% | Royal Enfield Interceptor 650 | ₹5.5 Lakh | ₹6 Lakh |
| Electric Two-Wheelers | 5% | 5% | Ola S1 Pro | ₹1,40,000 | ₹1,40,000 |
As you know, the new GST rules have been applied from 22nd September 2025.
Current GST on Two-Wheelers
- Scooters / bikes under 350 cc – 18% GST (no extra cess).
- Bikes above 350 cc – 40% GST.
- EV two-wheelers – 5% GST.
Latest Government & Industry Updates
- Auto body SIAM said this cut will help the two-wheeler industry grow.
- Dealers are worried because the cess may not be refundable, causing losses of around ₹2,500 crore.
- The Ministry of Heavy Industries announced that CNG two-wheelers tax has been cut from 28% to 18%, and may later come down to 12%.
- Honda has already reduced prices by up to ₹18,887 after GST change.
- Premium bikes like Pulsar NS 400 and Kawasaki Z 400 haven’t seen a big hike yet despite 40% tax.
- PM Modi said GST will keep changing as per the situation.
How GST Change Affects Bike Prices
Example 1: A scooter which was ₹1,00,000 earlier is now around ₹90,000 (excluding insurance & RTO).
Example 2: A 650 cc bike which was ₹5.5 lakh on loan earlier, will now cost close to ₹6 lakh.
So, small bike buyers are happy, but premium bike buyers are not.
Common Questions (FAQ)
Q: What is GST on two-wheelers now?
A: 18% – for bikes/scooters under 350 cc.
40% – for bikes above 350 cc.
5% – for electric two-wheelers.
Q: Did the 2025 Budget reduce GST?
A: No, the Budget only confirmed these rates.
Q: Why is GST higher on bikes than cars?
A: Premium two-wheelers are treated as “luxury” items.
Q: Will all bikes come under 18% GST in future?
A: SIAM has requested, but the government hasn’t agreed yet.
Q: What about EV bikes and scooters?
A: They remain at just 5% GST, to promote electric vehicles.
Q: From when is this GST applicable?
A: From 22 September 2025.
Final Words
This GST change has brought mixed feelings in the market.
For normal bikes and scooters, the 18% GST is a big relief and will make two-wheelers more affordable.
For big bikes above 350 cc, tax is now 40%, which has upset premium bike lovers.
Overall, the new GST will help increase sales of budget-friendly two-wheelers and also push more people towards electric scooters and bikes.