Published on Jul 13, 2026
GST on bikes and two-wheelers in India directly affect the ex-showroom pricing of motorcycles, scooters, and electric vehicles. Buyers generally pay GST as part of the final vehicle cost at the time of purchase. While conventional petrol-powered two-wheelers attract higher GST rates, the electric bike GST rate in India remains comparatively lower to encourage EV adoption. Recent GST-related revisions and policy discussions applicable from September 2025 have continued to influence pricing trends, affordability, and consumer demand across the Indian two-wheeler market.
GST is charged on the purchase of both new and used two-wheelers in India, including motorcycles and scooters. GST on two-wheeler purchases is generally included in the ex-showroom price paid by buyers at dealerships. The applicable bike GST rate depends on factors such as vehicle type and engine category. GST on motorcycles in India and GST on used bikes in India may differ depending on resale conditions and applicable taxation rules.
For example, if a scooter has an ex-showroom price of Rs. 1 lakh and attracts 18% GST, the applicable GST amount is generally included within the displayed ex-showroom cost.
Recent GST revisions effective from September 2025 have changed the taxation structure for several motorcycle categories. The updated bike GST slab 2026 applies lower GST rates to many commuter motorcycles, while premium bikes above 350cc now attract higher taxation. GST on bikes also differs for electric vehicles, with GST on EV scooters continuing at concessional rates to support EV adoption.
|
Bike Category |
Previous GST Rate |
Updated GST Rate |
|
Bikes Below 350cc |
28% GST |
18% GST |
|
Bikes Above 350cc |
28% GST + 3% Cess |
40% GST |
|
Electric Two-Wheelers |
5% GST |
5% GST |
Commuter and mid-range motorcycles below 350cc now attract a reduced two-wheeler GST rate of 18% from September 2025 onwards. This category includes models such as Hero HF Deluxe, Honda Dio 125, TVS Apache RTR/RR 310, and Classic 350 under GST on Royal Enfield bikes. The reduction from the earlier 28% GST slab may help improve affordability for many everyday buyers.
Premium motorcycles above 350cc now attract a higher 40% bike GST slab, which has increased ex-showroom prices for several performance-oriented models. This category generally includes GST on premium motorcycles such as Royal Enfield Himalayan 450, Interceptor 650, KTM 390 Duke series, and Bajaj-Triumph motorcycles, resulting in noticeably higher purchase costs for buyers.
Electric two-wheelers in India generally attract a lower 5% GST rate to encourage EV adoption and support cleaner mobility solutions. This concessional tax structure benefits buyers by reducing the bike price after GST compared to many petrol-powered models. The lower GST impact on two-wheelers in the EV segment has also supported faster growth in the electric mobility market.
Popular electric scooters and bikes benefiting from 5% GST include:
The lower scooty GST rate may help improve affordability for EV buyers.
Most motorcycles, scooters, and electric two-wheelers in India are generally classified under HSN Code 8711 for GST invoicing and taxation purposes. The HSN code for motorcycles helps businesses apply the correct rates and maintain accurate tax documentation under GST on two-wheeler transactions.
|
Product Type |
HSN Code |
|
Motorcycles |
HSN Code 8711 |
|
Scooters |
HSN Code 8711 |
|
Electric Two-Wheelers |
HSN Code 8711 |
Bike insurance premiums in India generally attract 18% GST in addition to the base insurance cost. This applies to both comprehensive insurance and third-party insurance policies. The applicable bike GST on insurance increases the final premium amount paid by vehicle owners under GST on two-wheeler insurance services.
For example, if a bike insurance premium is Rs. 5,000, an additional 18% GST of Rs. 900 may apply, making the total payable premium approximately Rs. 5,900.
GST may apply on used and second-hand two-wheelers depending on whether the seller is a registered dealer or an individual owner. Under the margin scheme, registered dealers generally pay GST only on the profit margin earned on resale instead of the full vehicle value. GST on bikes sold directly between individuals without business involvement may not usually apply. Dealers selling second-hand vehicles may also issue a GST invoice where applicable, while private individual-to-individual sales are generally treated differently under GST provisions.
Bike spare parts and accessories are generally taxed separately from the vehicle under GST provisions. Most components used in two-wheeler maintenance and customisation currently attract 18% GST after recent rate revisions.
|
Spare Part / Accessory Category |
Applicable GST Rate |
|
Helmets and riding gear |
18% |
|
Tyres and rubber tubes |
18% |
|
Seat covers and bike covers |
18% |
|
Mirrors, engine parts, and fittings |
18% |
Businesses are generally not allowed to claim Input Tax Credit (ITC) on bike purchases under Section 17(5)(a) of the CGST Act. However, certain exceptions are permitted where motorcycles are used for specific business purposes.
ITC may be allowed in cases such as:
The GST structure for motorcycles has influenced vehicle pricing differently across segments. Recent GST reductions for bikes below 350cc have helped lower ex-showroom prices for several commuter and mid-range models, while GST on superbikes and other high-capacity motorcycles has increased the cost of premium models due to higher tax rates.
Examples of estimated price impact:
Electric two-wheelers currently enjoy lower GST rates compared to petrol-powered motorcycles and scooters, helping improve EV affordability and encourage cleaner mobility adoption in India. Government incentives and concessional taxation have further strengthened the appeal of electric two-wheelers for cost-conscious buyers.
|
Vehicle Type |
GST Rate |
Government Incentives |
|
Petrol Bikes and Scooters |
18% or 40% depending on engine size |
Limited direct GST incentives |
|
Electric Bikes and Scooters |
5% GST |
EV subsidies and state incentives available |
|
Premium Electric Two-Wheelers |
5% GST |
Eligible for selected EV benefits and schemes |
Reduced GST rates on several two-wheelers have improved affordability for many consumers, especially in the commuter motorcycle segment. Lower taxation may also support higher demand among daily commuters, first-time buyers, rural customers, and entry-level motorcycle users across India.
Key benefits of reduced GST on two-wheelers include:
For buyers planning to purchase a new motorcycle or scooter, a two-wheeler loan may help manage upfront vehicle costs more comfortably. A personal loan can also be a suitable financing option, especially for higher-end models or buyers looking for greater flexibility in vehicle-related expenses.
Before applying, borrowers should compare personal loan or two-wheeler loan interest rates carefully to assess repayment suitability and plan monthly budgets more effectively alongside vehicle ownership expenses.
Bike GST rates continue to influence two-wheeler affordability, consumer demand, and EV adoption across India. Periodic revisions and recommendations by the GST Council also play an important role in shaping overall vehicle pricing and taxation policies.
For buyers planning to purchase a motorcycle or scooter, SMFG India Credit offers tailored two-wheeler loan solutions to help manage vehicle costs more conveniently.
Check your two-wheeler loan eligibility online and apply with a simple digital process.
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More on GST: |
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* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us
Most commuter motorcycles with smaller engine capacities, including many 100cc models, generally attract 18% GST under the revised taxation structure applicable to bikes below 350cc from September 2025 onwards.
GST may apply on used two-wheelers when sold by registered dealers under the margin scheme. However, direct sales between individual owners without business involvement may generally not attract GST.
GST forms part of the ex-showroom price and directly affects the final on-road vehicle cost. Higher GST rates generally increase purchase prices, insurance costs, registration charges, and overall ownership expenses for buyers.
The GST rate on scooters and motorcycles generally depends on engine capacity and vehicle category. Smaller commuter vehicles may attract lower GST slabs compared to premium or high-capacity motorcycles under revised GST provisions.
Imported motorcycles may attract GST along with customs duties and applicable cess charges, resulting in significantly higher overall taxation compared to many domestically manufactured motorcycles sold within India.
Current GST rates on two-wheelers generally vary based on engine capacity and vehicle type. Bikes below 350cc attract 18% GST, while premium motorcycles above 350cc attract 40% GST.
Businesses are generally restricted from claiming Input Tax Credit on motorcycles under Section 17(5) of the CGST Act, except in specified cases such as resale, passenger transport services, or training schools.
GST is generally applicable on certain loan-related charges such as processing fees and insurance components, but the EMI repayment amount itself does not usually attract separate GST as a standalone charge.
Electric two-wheelers currently attract lower GST rates to encourage EV adoption, reduce dependence on fossil fuels, and support cleaner transportation initiatives through improved affordability and government-backed incentives.
Yes, GST rates for two-wheelers generally vary depending on engine capacity. Lower-capacity commuter motorcycles may attract lower GST rates, while high-capacity premium motorcycles often attract higher taxation slabs.
Yes, GST generally applies separately on bike accessories, spare parts, tyres, helmets, and other related products, even when purchased independently from the vehicle or during servicing and maintenance.
GST is generally calculated as part of the ex-showroom price based on the applicable tax slab for the vehicle category, engine capacity, and type of two-wheeler being purchased by the buyer.
Yes, electric scooters generally attract lower GST compared to petrol-powered scooters. This concessional taxation structure has helped improve EV affordability and encourage wider adoption of electric mobility solutions.
A two-wheeler loan may help buyers spread the cost of purchasing a motorcycle or scooter through manageable monthly instalments instead of paying the full amount upfront. Buyers can also use a two-wheeler loan EMI calculator to estimate repayment obligations before applying.
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