What is the GST rate on bikes in India?

The GST rate on bikes in India depends on engine capacity. The government taxes motorcycles up to 350cc at 18%, down from the earlier 28%, and taxes motorcycles above 350cc at 40%. Electric bikes attract only 5% GST. These rates apply from 22 September 2025, with no compensation cess.

Did the GST on bikes change after September 2025?

Yes, the GST on bikes changed after the September 2025 reforms. Bikes up to 350cc had their GST cut from 28% to 18%, making most commuter bikes cheaper. However, bikes above 350cc saw their rate rise to 40%. Electric bikes stayed at 5%, unchanged by the reforms.

What is the GST rate on a bike up to 350cc?

A bike up to 350cc attracts 18% GST in India, reduced from the earlier 28%. Since most popular commuter bikes, such as the Splendor, Pulsar, Activa, and Classic 350, fall under this category, the majority of two-wheeler buyers now pay a lower 18% GST on their purchase.

Why does the government tax bikes above 350cc at 40%?

The government taxes bikes above 350cc at 40% GST, up from the earlier effective rate of 31% (28% GST plus a 3% cess), because it now classifies these bikes as luxury goods under the new tax structure. Premium motorcycles above 350cc have become more expensive after the September 2025 reforms.

What is the GST rate on electric bikes?

The GST rate on electric bikes in India is 5%, which is far lower than the rate on petrol bikes. The government applies this concessional rate to all electric two-wheelers and has left it unchanged in the September 2025 reforms to keep electric bikes affordable and encourage the shift to clean mobility.

Can I claim GST input tax credit on a bike?

No, you cannot claim input tax credit (ITC) on a bike bought for personal use because Section 17(5) of the CGST Act blocks it. You can claim ITC only if you use the bike for eligible business purposes, such as reselling bikes, providing passenger transport, offering goods or delivery services, or operating a driving school.

What is the HSN code for bikes?

The HSN code for bikes in India is 8711, which covers all two-wheelers, including motorcycles, scooters, and mopeds. Bike spare parts fall under a separate HSN code,

Using the correct HSN code on invoices ensures that you apply the correct GST rate during billing and filing. 8. Do sellers charge GST on used or second-hand bikes?

Yes, GST applies to used bikes sold by a registered dealer, but only on the dealer’s margin, which is the difference between the selling and purchase price. A sale between two individuals, where neither is a registered dealer, does not attract any GST under the margin scheme.

What is the current GST rate on bikes?

The current GST rate on bikes is 18% for two-wheelers up to 350cc, 40% for those above 350cc, and 5% for electric bikes. These rates have been in effect since 22 September

No compensation cess applies to bikes under the current GST structure. 10. Do lenders charge GST on a bike loan or EMI?

You do not pay GST on the loan amount or EMI when you buy a bike on finance. However, the bank’s processing fees, documentation charges, and other service charges attract 18% GST. The seller includes the GST on the bike in its ex-showroom price at the time of purchase.

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GST Taxation

GST on Bikes in India: New Rates by Engine Capacity

Sidharth Ravichandran

Updated:Jul 9, 2026

7 min read

GST on bikes in India depends on engine capacity. Two-wheelers up to 350cc attract 18% GST, while those above 350cc attract 40% GST. Electric bikes continue to be taxed at 5%. These revised rates were announced in the 56th GST Council meeting and came into effect on 22 September 2025. This reduced the GST on smaller bikes from 28% to 18% and increased it on larger motorcycles above 350cc.

The change was introduced to make everyday two-wheelers more affordable. High-powered bikes above 350cc attract a higher GST rate because they are classified as premium vehicles.

This guide explains GST rates on bikes by engine capacity and the changes introduced in the September 2025 reform. It also covers HSN codes, ITC rules, and GST on used and electric bikes as of 2026.

Key Takeaways

GST on bikes in India is 18% for two-wheelers up to 350cc, 40% for those above 350cc, and 5% for electric bikes.
The rate on bikes up to 350cc was cut from 28% to 18% on 22 September 2025, making most commuter bikes cheaper.
Bikes above 350cc had their rate raised to 40%, up from an effective 31%, and are now treated as luxury goods.
Electric bikes continue to attract a concessional 5% GST, unchanged by the September 2025 reforms.
Two-wheelers fall under HSN code 8711, while bike spare parts fall under HSN code 8714.

List of Bikes and GST Impact Post September 2025 Changes

The September 2025 reform affected bikes differently based on engine capacity, so popular models fall on either side of the 350cc line.

The table below shows how the GST change impacts some of India’s most popular bikes:

Popular Bike	Engine Capacity	GST Change	Impact
Hero Splendor Plus	97cc	28% → 18%	Cheaper
Honda Activa	110cc	28% → 18%	Cheaper
Bajaj Pulsar 125	124cc	28% → 18%	Cheaper
TVS Apache RTR 160	160cc	28% → 18%	Cheaper
Yamaha R15	155cc	28% → 18%	Cheaper
Royal Enfield Classic 350	349cc	28% → 18%	Cheaper
Royal Enfield Hunter 350	349cc	28% → 18%	Cheaper
Jawa 350	334cc	28% → 18%	Cheaper
KTM 390 Duke	399cc	31% → 40%	Costlier
Royal Enfield Himalayan 450	452cc	31% → 40%	Costlier
Triumph Speed 400	398cc	31% → 40%	Costlier
Royal Enfield Interceptor 650	648cc	31% → 40%	Costlier
Harley-Davidson X440	440cc	31% → 40%	Costlier

HSN Codes and GST Rates for Bikes

Every two-wheeler and its parts are classified under a specific code in the GST system, which determines the tax treatment. Bikes fall under HSN code 8711, while their spare parts fall under a separate code. Here are the relevant HSN codes for bikes:

Item	HSN Code	GST Rate
Electric two-wheelers	8711	5%
Petrol two-wheelers up to 350cc engine capacity	8711	18%
Petrol two-wheelers with an engine capacity of above 350cc	8711	40%
Bike spare parts and accessories	8714	18% or 28%

Note: HSN code 8711 covers motorcycles, scooters, and mopeds. Use the correct HSN code on invoices and GST filings to avoid classification issues. If you’re unsure, use an HSN code finder before billing.

Who Can Claim GST Input Tax Credit on a Bike?

GST paid on a two-wheeler can be claimed as Input Tax Credit (ITC) only for eligible business purposes, subject to GST rules and restrictions. Here is how ITC applies:

Personal use is blocked: Under Section 17(5) of the CGST Act, ITC on a bike bought for personal use is not allowed, even if you are GST-registered.
Resale by dealers: A dealer who buys bikes to sell them can claim ITC on that stock.
Passenger transport: A business using bikes to provide passenger transport, such as bike taxis, can claim ITC.
Goods and delivery transport: A business using bikes to deliver goods, such as a courier or food delivery service, can claim ITC.
Driving schools: A driving school using bikes for training can claim ITC.

Note: GST is not charged on the principal loan amount or EMI repayment for bike purchase. However, banks may charge 18% GST on processing fees and other applicable service charges.

GST on Used and Second-Hand Bikes

GST on used and second-hand bikes depends on the seller and transaction type, with tax applying only in specific cases rather than on every resale. Here is how it works:

Sold by a registered dealer: When a registered dealer sells a used bike, the dealer charges GST only on the margin earned from the sale. The margin is the difference between the selling price and the purchase price, not the full value.
Sold between individuals: When one individual sells a bike to another, and neither person is a registered dealer, they do not charge GST on the sale.

Planning to establish a business in the two-wheeler sector? Whether you operate a dealership, delivery fleet, or rental service, having the right GST structure can help you manage tax liabilities effectively. Let RegisterKaro assist you with GST registration and guide you in claiming ITC as per applicable rules. Contact us today to set up your two-wheeler business with the right compliance support!

Sidharth Ravichandran

Sidharth Ravichandran is a Chartered Accountant with over 6 years of experience advising startups, SMEs, and growing enterprises on company registrations, taxation, and intellectual property protection. He has been instrumental in building one of India's leading business compliance and legal services platforms. Sidharth regularly writes and speaks on compliance matters, showcasing a combination of regulatory knowledge with practical business perspectives. Through his thought leadership and professional expertise, Sidharth remains committed to making legal, compliance, and intellectual property services more accessible for India's growing startup and business ecosystem.