Current Bike GST Rates

Category

GST Rate (2025)

Two-Wheeler Insurance

18%

Bikes with Engine Above 350cc

31%

Bikes with Engine Below 350cc

28%

Bike Parts (Brake Pads, Clutch Cables, etc.)

28%

GST Rates on Different Types of Bikes

The GST rates vary depending on bike type and engine capacity. Understanding these rates is essential to make informed purchase decisions.

GST on 100cc and Below Bikes

The GST rate on two-wheelers with an engine capacity of 100cc or less is 28%. These bikes are commonly used for daily commuting due to their fuel efficiency and affordability.

Examples of 100cc bike models:

  • Hero HF Deluxe

  • Bajaj Platina 100

  • Hero Passion Plus

GST on 125cc Bikes

GST on bikes with a 125cc engine capacity also falls under the 28% slab. These bikes offer a balance of fuel efficiency and power, making them popular among budget-conscious riders.

Examples of 125cc bike models:

  • Honda SP 125

  • Bajaj Pulsar 125

  • TVS Raider 125

GST on Electric Bikes

GST for electric bikes is just 5%, making them more affordable compared to petrol-powered motorcycles. The reduced tax rate is part of the government’s push to promote eco-friendly transportation.

In comparison, petrol and diesel bikes fall under the 18% GST slab, which is significantly higher. This tax difference is intended to make electric bikes more affordable and attractive to consumers, encouraging the shift toward sustainable mobility solutions.

GST on Other Two-Wheelers

Two-wheelers with larger engine capacities, including premium motorcycles above 350cc, attract a higher GST rate of 31%. These include popular models like the Royal Enfield Interceptor 650 and the Harley-Davidson Street 750, which are often chosen for their performance and premium features.

Scooters and mopeds, which generally have smaller engines, typically attract a 28% GST rate based on their capacity.

Bike Parts GST Rate

1. Motorcycle Parts and Accessories:

GST on bike parts is 28%, which applies to essential components such as engines, chassis, suspensions, transmissions, and braking systems.

2. Spare Parts and Components:

Most spare parts and components used for repairs or maintenance, such as oil level gauges and clutch cables, are taxed at 28% GST.

3. Tyres and Tubes:

Tyres and tubes are taxed at 28% GST, including both tube-type and tubeless variants used in motorcycles and scooters.

4. Batteries:

The GST for two-wheeler batteries, including lead-acid and lithium-ion variants, is 28%. This applies to both conventional petrol bikes and electric two-wheelers, affecting the overall cost of ownership.

5. Helmets:

Helmets are taxed at a lower 18% GST, promoting road safety by making protective gear more affordable for riders.

6. Lubricants and Greases:

Engine oils, chain lubricants, and other two-wheeler maintenance fluids attract 18% GST.

GST Calculation on Bikes and Two-Wheelers

Example 1: Bike Below 350cc

Suppose you are purchasing a bike priced at ₹1,00,000 (excluding GST) that falls under the 28% GST slab.

  1. Base Price: ₹1,00,000

  2. GST Amount: ₹1,00,000 × 28% = ₹28,000

  3. Total Price (Including GST): ₹1,00,000 + ₹28,000 = ₹1,28,000

Example 2: Bike Above 350cc

If the bike’s engine capacity exceeds 350cc, and the bike is priced at ₹2,00,000 (excluding GST), it falls under the 31% GST slab.

  1. Base Price: ₹2,00,000

  2. GST Amount: ₹2,00,000 × 31% = ₹62,000

  3. Total Price (Including GST): ₹2,00,000 + ₹62,000 = ₹2,62,000

GST Impact on Two-Wheelers

1. Sales Decline:

High GST rates make two-wheelers, especially premium bikes, more expensive. This discourages budget-conscious buyers, reducing overall sales volumes.

2. Increased Insurance Costs:

Two-wheeler insurance is taxed at 18% GST, which adds to the overall cost of ownership. Combined with high GST on the vehicle itself, this creates a heavier financial burden on buyers.

3. Industry Losses:

Declining sales and reduced affordability can lead to stagnation in the two-wheeler industry. Manufacturers may face inventory buildup, production slowdowns, and reduced profitability.

Potential Benefits of GST Reduction

1. Lower Prices:

Reducing GST rates would directly decrease the cost of two-wheelers, making them more affordable for consumers.

2. Boosted Sales:

Affordable pricing could encourage more buyers, particularly in the budget and mid-range segments, leading to increased demand.

3. Industry Growth:

Higher sales volumes can support manufacturers in expanding their operations, launching new models, and investing in innovative technologies.

4. Increased Investments:

A thriving industry with growing demand can attract domestic and foreign investments, strengthening India’s position as a global two-wheeler manufacturing hub.

ITC Availability on Bikes

Input Tax Credit (ITC) on bikes is generally not available under Section 17(5)(a) of the CGST Act, except in specific cases:

  • Passenger transportation: ITC is allowed if bikes are used for bike taxi or rental services.

  • Further supply: Businesses selling or supplying bikes can claim ITC on purchases.

  • Training services: Driving schools using bikes for training can avail ITC.

GST Advantages for Two-Wheeler Buyers

1. Increased Transparency:

GST has simplified the pricing structure for two-wheelers by replacing multiple taxes with a single, unified tax. This change has led to greater transparency, enabling buyers to understand the true cost of their purchase without hidden charges.

2. Reduced Price Differences:

Before GST, different states had varied tax rates, resulting in significant price disparities for two-wheelers. GST has harmonised these rates, making prices more consistent across the country. This ensures fairness and allows consumers to make informed decisions without worrying about regional price fluctuations.

3. Benefits for Electric Vehicles:

The GST regime promotes the adoption of electric vehicles by offering lower tax rates and various incentives. This not only makes electric two-wheelers more affordable but also supports environmental sustainability. Buyers can benefit from reduced prices and contribute to a greener future.

Frequently Asked Questions (FAQs)

1. How does GST affect the insurance premiums for two-wheelers?

GST on two-wheeler insurance is 18%, increasing insurance policies’ overall cost. This tax applies to all types of two-wheeler insurance, including third-party and comprehensive coverage.

2. Are there any exemptions or reductions in GST for electric two-wheelers?

Yes, electric two-wheelers benefit from a lower GST rate of 5%, compared to the 28% GST on conventional two-wheelers.

3. How can I calculate the total cost of buying a two-wheeler including GST?

To calculate the total cost, follow these steps:

  1. Determine the ex-showroom price of the two-wheeler (excluding GST).

  2. Multiply the ex-showroom price by the applicable GST rate (28% for conventional two-wheelers 5% for electric two-wheelers).

  3. Add the GST amount to the ex-showroom price to get the total cost.

4. How does GST affect the resale value of two-wheelers?

GST primarily affects the initial purchase price of two-wheelers, but it doesn’t directly impact the resale value. The resale value is more influenced by factors like the bike’s condition, age, mileage, and market demand.

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