GST Tax Hiked From 28 to 40% For 350 cc Plus Bikes - How It Impacts Cost Of Royal Enfield, KTM & Triumph Bikes

The Finance Minister, Nirmala Sitharaman, yesterday announced that GST slabs have been revised across sectors. The Indian automotive industry witnessed a significant impact owing to the change in tax slabs which saw it drop from the existing 28 per cent to 18 per cent for all ICE two-wheelers under 350 cc, which is a great move and it should help improve sales of motorcycles and scooters in our country. 

On the flipside, GST rates for two-wheelers above 350 cc have been increased from the existing 28 per cent to 40 per cent, which is a very steep hike. However, we would like to bring to the notice our viewers that an additional 3 per cent cess was applied so realistically the hike is 9 per cent. The revised tax slab comes into effect from September 22. Here’s how it will impact pricing of popular two-wheelers based on the current ex-showroom pricing with the 40 per cent GST tax addition.

We can understand charging big bikes with heavier tax slabs but penalising 350-500 cc bikes seems harsh. India is fast emerging as the hub for mid-capacity motorcycles as we can see with the Aprilia 457 family, and the upcoming BMW 450 platform and the KTM 490 twin-cylinder platform. So while it’s great news that these bikes will be exported from our country, the revision in GST rates will impact domestic sales. For the hordes of enthusiasts who have been waiting to enter the mid-capacity segment for many years this comes as a rude shock. 

On a personal level, I feel the 350-500 cc segment of bikes should have been taxed at the existing 28 per cent and the bikes above 500 cc should have fallen under the 40% GST tax slab. This would have ensured volume growth domestically while pushing big bike manufacturers to locally produce their premium bikes in India.