NEW DELHI, INDIA – For millions of Indians, the dream of owning a powerful, thumping motorcycle might be about to get significantly more expensive. A new proposal being considered by the GST Council could lead to a major GST hike on bikes with an engine capacity of 350cc and above, a move that would impact some of the most popular and aspirational motorcycles in the country.
Sources report that a panel of ministers has recommended classifying these higher-capacity bikes as “luxury goods,” which would open the door for an additional luxury cess on top of the existing 28% GST. If this proposal is approved in the upcoming GST Council meeting, the price of iconic bikes from brands like Royal Enfield, KTM, Triumph, and Harley-Davidson could see a sharp increase.
This news has sent ripples through the two-wheeler industry and has left thousands of potential buyers anxious. Let’s break down what this proposal means, which bikes will be affected, and how much more you might have to pay.
What is the New GST Proposal?
Currently, all motorcycles and scooters, regardless of their engine capacity, are taxed at the highest GST slab of 28%. The new proposal aims to change this.
The idea is to create a new category for motorcycles with engines 350cc and above. The government panel argues that these bikes are not just for basic transportation but are often purchased as lifestyle or leisure products. By classifying them as luxury goods, they would be treated similarly to luxury cars and SUVs, which attract an additional cess ranging from 1% to 22% on top of the 28% GST.
While the exact percentage of the luxury cess on motorcycles has not been decided, even a small addition would lead to a substantial motorcycle price increase.
Which Popular Bikes Will Be Affected?
This is where the news hits home for most bike lovers. The 350cc-and-above category is one of the fastest-growing and most popular premium segments in India. If the GST on bikes 2025 is changed, here are some of the models that will get more expensive:
Royal Enfield: This brand will be the most affected. Crucially, this includes the entire modern 350cc platform, featuring the best-selling Royal Enfield Classic 350, Meteor 350, Bullet 350, and Hunter 350. It will also impact their bigger bikes like the Himalayan, Scrambler 650, and Interceptor 650.
Bajaj-Triumph: The hugely popular, made-in-India Triumph Speed 400 and Scrambler 400 X would fall under this new tax rule.
Bajaj-KTM: The performance-oriented KTM 390 Duke, 390 Adventure, and RC 390 will see a price jump.
Hero-Harley-Davidson: The Harley-Davidson X440, a major player in the 400cc segment, will also be impacted.
Jawa/Yezdi: Almost the entire lineup of both classic brands would become more costly.
International Brands: All bigger bikes from brands like Kawasaki, Honda, Benelli, and Suzuki will also attract the higher tax.
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How Much Will Motorcycle Prices Increase?
The final on-road price of a bike depends on the ex-showroom price, which includes GST. If an additional cess is applied, the ex-showroom price will go up, which in turn will also increase the registration and insurance costs.
Let’s do a simple calculation. Imagine a bike with an ex-showroom price of ₹2,50,000.
With a 3% Cess: The price would increase by approximately ₹7,500.
With a 5% Cess: The price would increase by approximately ₹12,500.
With a 10% Cess: The price would increase by a massive ₹25,000.
This means a bike like the Royal Enfield Classic 350, which is an entry point into premium biking for many, could see its on-road price jump by ₹10,000 to ₹15,000, making it much harder for middle-class buyers to afford.
Why Is the Government Considering This GST Hike?
The primary motivation behind this proposal is to increase tax revenue. Governments see the rapidly growing premium motorcycle market as a potential source of additional funds. The argument from their side is one of fairness: if luxury cars are taxed more, why shouldn’t powerful, expensive motorcycles be treated the same? They are positioning this as a tax on a “luxury” choice, not a necessity.
The Auto Industry Reacts
The auto industry is expected to strongly oppose this move. Industry bodies like the Society of Indian Automobile Manufacturers (SIAM) have long argued that the 28% GST on two-wheelers is already too high, as they are a primary mode of transport for millions.
A higher GST hike on bikes in the 350cc segment could kill the momentum in the premium market, which has been a bright spot for the industry. It could lead to lower sales, a slowdown in production, and potentially impact jobs. Manufacturers have invested thousands of crores in developing this segment, and a sudden tax increase would hurt their plans and the overall market sentiment.
What Happens Next?
It is crucial to remember that this is still a proposal. It has not been approved yet. The recommendation will be presented and debated at the next GST Council meeting. For it to become a law, a majority of the council, which includes the Union Finance Minister and finance ministers from all states, must agree to it.
The two-wheeler industry will certainly make strong representations to the government to reconsider this proposal. The final decision will depend on the outcome of the council’s discussions.
Conclusion: A Waiting Game for Bikers
The possibility of a GST hike on 350cc bikes has created a cloud of uncertainty over the Indian motorcycle market. A significant motorcycle price increase for some of the country’s most beloved models, including the iconic Royal Enfield Classic 350, is now a real possibility. For Latest Update Connect with ZigFeed.
For now, bikers and manufacturers can only wait and watch. The final decision rests with the GST Council, and its next meeting will be one of the most closely watched events for the entire Indian auto industry.
