GST Reduction From 28 to 18% On Sub-350 cc Bikes - How It Impacts Honda Activa, Hero Splendor & Royal Enfield Classic 350 Prices

The Finance Minister has announced a big change in the GST rates which will have a significant impact on the Indian two-wheeler industry too, among other sectors. There’s good news and bad news for scooter and motorcycle customers, and let me start on a sweet note first. 

The GST rate on two-wheelers has been reduced from the existing 28 per cent to 18 per cent to all two-wheelers with engine displacement of 350cc or below. This will have a positive impact on virtually the entire two-wheeler industry as around 98 per cent of the two-wheeler industry volumes come from segments of up to 350cc. The above was a request from the industry for many years in which the manufacturers had asked for an 18 per cent GST rate for two-wheelers under 125 cc space. 

The revised tax slab comes into effect from September 22. Here’s how it might help in reducing the cost of popular two-wheelers based on the current ex-showroom pricing with the 10 per cent GST reduction.

So while for the overall two-wheeler industry the GST reduction is great news, for the aspirational Indian bikers (above 350 cc the GST is now 40 per cent), this comes as an unpleasant development. However, in the overall scheme of things, the reduction in GST is welcome news for not only the Indian two-wheeler manufacturers but also ancillary brands as well.