Two Wheeler GST Rate List – New Updated GST Rates 2025

The Two-Wheeler GST Tax Rate List 2025 has brought big relief to the majority of bike buyers in India by reducing the rate for sub-350cc bikes. At the same time, premium motorcycles will get costlier due to the higher tax rate. The GST cut on electric bikes will further strengthen India’s EV revolution. If you’re planning to buy a two-wheeler, waiting until after 22nd September 2025 could save you a lot of money, especially for commuter motorcycles. In this article, we will explain the updated GST rates for two-wheelers in 2025, how these changes will impact customers and manufacturers, and what you need to know if you are planning to buy a bike soon.

Updated Two-Wheeler GST Rate List 2025

The government has introduced a two-tier GST structure for motorcycles, keeping affordability in mind for the majority of buyers while increasing the tax burden on high-end bikes.

Category	GST Rate (2025)	Previous Rate	Notes
Bikes below 350cc	18%	28%	Big relief for 98% of India’s two-wheeler market
Bikes above 350cc	40%	31%	Considered “sin tax”, impacts premium bikes like Royal Enfield
Electric two-wheelers	5%	12%	Encouragement for EV adoption
Bike insurance	18%	18%	No change
Spare parts (brake pads, clutch cables, gauge oil)	28%	28%	No change

GST on Motorbikes

Earlier, all two-wheelers with engine capacity less than 350cc were taxed at 28%, while those above 350cc attracted 31% (including cess). With the new GST rule effective from 22nd September 2025, bikes under 350cc will now be much cheaper, as their tax rate is reduced to 18%. On the other hand, premium bikes with engines above 350cc will see a steep increase to 40% GST. This move will impact brands like Royal Enfield, Harley-Davidson, and Kawasaki, which sell higher capacity motorcycles.

GST on Electric Bikes

The government has kept the GST on electric two-wheelers at just 5%, one of the lowest tax slabs. This is done to encourage eco-friendly transport, reduce dependence on petrol, and promote sustainable commuting. For consumers, this makes electric scooters and bikes an affordable and practical option for daily use.

Impact of New GST on Two-Wheeler Industry

• Positive for mass buyers: Most Indians buy bikes under 350cc. The GST cut from 28% to 18% will bring prices down, boosting sales.
• Negative for premium segment: Bikes above 350cc will now become costlier, affecting brands like Royal Enfield, Triumph, and KTM.
• Boost for EVs: The low 5% GST on electric bikes is expected to accelerate EV adoption.
• Festive season push: With the new rates effective from 22nd September 2025, the industry is expecting one of the best festive seasons in years.

Why Did the Government Change GST on Bikes?

The government wanted to balance affordability with luxury taxation. Since nearly 98% of bikes sold in India are below 350cc, the reduction to 18% directly benefits middle-class buyers. At the same time, premium motorcycles are being treated as luxury goods with the 40% “sin tax”, similar to how luxury cars are taxed.