The Indian government has slashed GST on two wheelers up to 350cc from 28 percent to 18 percent, effectively reducing ex-showroom prices by 10 percent. While motorcycles above 350cc now attract a higher levy, it’s the sub-350cc segment – bread and butter commuter models that make up the majority of two-wheeler sales in India – that stand to benefit the most. Here’s what that means for buyers.
Uniform GST rate scrapped
Earlier, all two-wheelers attracted a flat 28 percent GST, irrespective of displacement. However, with the revised structure, motorcycles and scooters up to 350cc now fall in the 18 percent slab, translating to a 10 percentage point saving on the final ex-showroom price.
To understand the real-world impact, we’ve considered three of India’s most popular two-wheelers – the Honda Activa, Hero Splendor+ (motorcycle) and Royal Enfield Classic 350. These are all best-sellers in their respective categories and clearly illustrate how the revised GST slabs affect buyers across segments.
Impact on scooters
The Honda Activa, India’s bestselling scooter, currently starts at Rs 81,045 (ex-showroom, Delhi). With GST dropping to 18 percent, its price falls to Rs 68,109 – a saving of Rs 12,936. For a mass-market product at this price point, that’s a substantial reduction, making it even more accessible to first-time buyers.
Impact on commuters
The country’s highest-selling motorcycle, the Hero Splendor+, is priced from Rs 80,166 (ex-showroom, Delhi). Post the GST cut, its effective price drops to Rs 68,066, translating to a saving of Rs 12,050. For a commuter bike that already dominates its class, this lower entry point could drive sales volumes and get more people on two wheels.
Impact on lifestyle bikes
At the higher end of the sub-350cc bracket sits the Royal Enfield Classic 350, a consistent segment bestseller. Despite its name, the bike’s engine displaces 349cc, which keeps it within the lower tax bracket. Its current starting price of Rs 1.97 lakh (ex-showroom, Chennai) now drops to Rs 1.67 lakh – nearly Rs 30,000 cheaper. This substantial price change could make the Classic 350 (and its siblings because they too will become more affordable) even more attractive to aspirational buyers.
| Revised pricing for motorcycles up to 350cc | |||||
|---|---|---|---|---|---|
| Current ex-showroom prices | Pre-reform GST rate | Reformed GST rate | New Ex-showroom prices after revised GST rates | Difference | |
| Honda Activa 110 | Rs 81,045 to Rs 95,567(ex-showroom, Delhi) | 28 percent | 18 percent | Rs 68,109 to Rs 81,193 | Rs 12,936 to Rs 14,374 |
| Hero Splendor+ | Rs 80,116 to Rs 81,416 (ex-showroom, Delhi) | 28 percent | 18 percent | Rs 68,066 to Rs 69,171 | Rs 12,050 to Rs 12,245 |
| Hero Glamour X | Rs 90,000 to Rs 1 lakh (ex-showroom, Delhi) | 28 percent | 18 percent | Rs 76,464 to Rs 84,960 | Rs 13,536 to Rs 15,040 |
| Royal Enfield Classic 350 | Rs 1.97 lakh to Rs 2.35 lakh(ex-showroom, Chennai) | 28 percent | 18 percent | Rs 1.67 lakh - Rs 2.00 lakh | Rs 30,000 - Rs 35,000 |
With the revised GST structure, two-wheelers up to 350cc have become significantly more affordable across categories – from scooters and commuters to popular 350cc retro bikes. On the flip side, bikes above 350cc now get pricier. For budget-conscious buyers and those eyeing their first Royal Enfield, the tax cut could prove to be the push needed to seal the deal.
