GST on Bikes in India
Bikes attract 18% GST in India when the engine capacity is 350cc or below, and 40% GST above 350cc. Electric two-wheelers attract 5%.
Working out the GST on bikes
The rate turns on engine capacity, and the calculator below uses 18% — the rate for a two-wheeler up to 350cc. Above 350cc it is 40%, and an electric two-wheeler is 5%, so confirm the capacity before you bill. Multiply the taxable value by 18 percent to get the GST, then add it to the base price for the total.
- For an intra-state sale, the 18% splits into 9% CGST and 9% SGST.
- For an inter-state sale, a single 18% IGST applies instead.
- The calculator on this page is pre-set to the 18% rate and handles both cases.
A worked example
Suppose a bike has a taxable value of ₹1,10,000 before tax. Applying 18% GST works out as follows.
Engine capacity decides the rate
The 56th GST Council split the two-wheeler market in two on 22 September 2025 through Notification 9/2025-Central Tax (Rate). Commuter bikes got cheaper and premium motorcycles got noticeably more expensive. The 350cc line is the whole story.
| Two-wheeler type | Engine capacity | GST rate |
|---|---|---|
| Petrol / diesel motorcycle or scooter | Up to 350cc | 18% (was 28%) |
| Petrol / diesel motorcycle | Above 350cc | 40% (was 31%) |
| Electric two-wheeler | Any | 5% (unchanged) |
| Parts & accessories (HSN 8714) | Any | 18% (was 28%) |
| Tyres and tubes | Any | 18% (was 28%) |
The real cost of the 350cc split
The numbers are stark at either end. A ₹1,10,000 commuter bike now attracts ₹19,800 of GST instead of ₹30,800 at the old 28%, saving roughly ₹10,000. A ₹3,00,000 premium motorcycle above 350cc now attracts ₹1,20,000 instead of ₹93,000 under the old 28% plus 3% cess, costing ₹27,000 more. So a Royal Enfield Classic 350 sits just inside the cheaper bracket while a 400cc model sits just outside it, and that single cc difference moves the tax by 22 percentage points.
Parts and servicing also got cheaper. Spare parts under HSN 8714 and tyres both moved from 28% to 18%, which cuts routine maintenance costs for the commuter segment.
You probably cannot claim input tax credit
Section 17(5)(a) blocks ITC on two-wheelers just as it does on cars, even when the bike is bought in a company name for genuine business use. The exceptions are narrow: you can claim it if you are in the business of supplying vehicles, if the bike is used for passenger transport such as a bike-taxi service, or if it is used for riding instruction. A business buying a scooter for deliveries by its own staff generally cannot claim the GST, which surprises many small businesses.
Costs GST does not cover on your bike
GST applies to the ex-showroom price only. Road tax and registration are state levies outside GST entirely, which is why on-road prices differ between states. Bike insurance is a separate service taxed at 18% on the premium. Accessories fitted at the dealership carry their own rates. An e-way bill is required when transporting bikes valued above ₹50,000. Second-hand bikes sold by a registered dealer attract GST, though a private individual selling their own bike does not charge it.
Buying on EMI or through a dealer scheme
GST is charged upfront on the full ex-showroom value at the time of sale. An EMI plan splits your payment, not the tax, so the whole GST amount is built into the financed principal from day one. Loan processing fees charged by the lender are a separate service at 18%. A booking advance is not itself a supply, so the tax crystallises when the bike is invoiced and delivered; if you cancel, the GST on any refund is adjusted through a credit note.
Second-hand bikes and the margin scheme
Buy a used bike privately from another individual and no GST applies, since they are not a registered supplier. Buy from a registered dealer and GST does apply, though the dealer may use the margin scheme, charging tax only on the difference between what they paid and what they sell for rather than on the full price. That keeps the same bike from being taxed twice on its whole value. Ask whether the invoice is on a margin basis, since it affects what you actually pay.
Common invoicing errors
Three mistakes account for most disputes in two-wheeler billing. Applying the wrong slab by misreading engine capacity around the 350cc line, which moves the rate by 22 points. Using HSN 8711 for parts that belong under 8714. And claiming ITC on a bike blocked under Section 17(5)(a). Since February 2025 HSN codes must be selected from a dropdown in GSTR-1 rather than typed, which catches some of this earlier than it used to.
Frequently asked questions
Bikes up to 350cc attract 18% GST, reduced from 28% on 22 September 2025. Bikes above 350cc attract 40%, up from the earlier 28% plus 3% cess. Electric two-wheelers remain at 5%.
The 56th GST Council classified high-displacement motorcycles as a discretionary luxury purchase and moved them to the new 40% demerit rate, while cutting commuter bikes up to 350cc to 18% to make everyday transport cheaper.
Electric two-wheelers attract 5% GST, unchanged by the 2025 reforms. The gap against a petrol bike at 18% is a significant part of the cost case for switching.
Generally no. Section 17(5)(a) blocks ITC on two-wheelers even when bought in a company name. The exceptions are if you supply vehicles, run passenger transport such as a bike taxi, or provide riding instruction.
No. GST applies to the ex-showroom price. Road tax and registration are state levies outside GST, and insurance is taxed separately at 18% on the premium.