From September 22, 2025, the GST on motorcycles with engines above 350cc will increase from 28% to 40%. Several premium bikes, including Bajaj Pulsar, KTM Duke, and Royal Enfield Himalayan, will become more expensive. This could lead to an increase in the prices of these bikes by ₹13,000 to ₹20,500.
New Delhi: The government has decided to increase the GST on motorcycles with engines above 350cc to 40% from September 22, 2025. Currently, these bikes attract 28% GST and a 3% cess. Following this change, premium bikes like Bajaj Pulsar, KTM Duke, Royal Enfield Himalayan, and others will become more expensive by ₹13,000 to ₹20,500. Bajaj and Royal Enfield have demanded the implementation of a uniform tax rate across all segments.
New Tax on Bikes Above 350cc
Currently, motorcycles with an engine capacity exceeding 350cc are subject to 28% GST and a 3% cess, making the total tax rate 31%. After the new rates are implemented, this tax will be raised to 40%. This will directly impact the prices of bikes. According to experts, this could result in an increase of approximately 9% in the prices of these motorcycles.
Affected Bike Models
GST was already applicable to Royal Enfield's 350cc bikes like Hunter, Classic, Meteor, and Bullet, so they will not be significantly affected. However, larger bikes such as Himalayan 450, Gurkha 450, Scram 440, and Royal Enfield Interceptor 650 will attract 40% GST instead of 28%. Similarly, the prices of premium motorcycles like Bajaj Pulsar NS400Z and KTM 390 Duke will also increase.
Estimated Price Increase
According to experts, the price of the Bajaj Pulsar NS400Z could increase by approximately ₹13,100. The prices of the KTM 390 Duke and Royal Enfield Interceptor 650 could see an increase of over ₹20,000. Triumph's Speed 400, Scrambler 400X, and Thruxton 400 will experience an increase of ₹17,000 to ₹18,800. The price of the Royal Enfield Himalayan 450 is expected to rise by around ₹20,500.
Bajaj Auto and Royal Enfield have urged the GST Council to implement a uniform tax rate across all segments. Siddhartha Lal, MD of Royal Enfield, and Rajiv Bajaj, MD of Bajaj Auto, stated that keeping the tax rate lower for bikes with engines below 350cc would have a lesser impact on domestic demand but would negatively affect exports. They also mentioned that implementing a uniform tax rate for all premium motorcycles would be beneficial for both the market and exports.
Impact on the Two-Wheeler Market
Experts believe that the new tax rates will create a stir in the two-wheeler market. Customers looking to buy premium motorcycles may either be willing to pay the higher price or might postpone their purchase. This will compel companies to re-evaluate their pricing strategies. Furthermore, companies like Bajaj, Royal Enfield, and KTM may adjust their sales and production plans according to the new tax slabs.
The impact of the new tax rates will be more pronounced on buyers in smaller cities. While customers in larger cities may have the financial capacity to afford more expensive bikes, price increases in smaller towns could affect sales. Therefore, companies might need to modify their marketing and dealership strategies.
Customer Preparedness
Customers purchasing bikes after the GST implementation on September 22, 2025, will have to pay a higher price. Those who were already planning to buy a bike will need to consider the price changes. Additionally, customers can make decisions based on their budget by waiting for offers and deals from companies.
While buying premium bikes in the two-wheeler market will become more expensive after the new GST rates are implemented, its popularity is unlikely to be significantly impacted. Companies like Bajaj, Royal Enfield, KTM, and Triumph are working on new strategies to offer alternatives and benefits to their customers despite the price hike.
