If you're buying a bike in India in 2026, the GST rate is 18% for motorcycles up to and including 350cc, 40% for motorcycles above 350cc, and 5% for electric two-wheelers.
The revised rates came into effect on 22 September 2025, following the 56th GST Council meeting.
This matters because a lot of information online still mentions the older 28% GST structure.
After the September 2025 GST reforms, the tax you pay now depends mostly on your bike's engine capacity or whether it is electric.
Let’s get to know GST on bikes in India, how it is calculated, relevant HSN codes, GST on insurance and parts, and what changed under the new rules.
What Is the Current GST Rate on Bikes in India?
The current GST rate on two-wheelers in India follows three main slabs:
- Petrol motorcycles up to and including 350cc: 18%
- Petrol motorcycles above 350cc: 40%
- Electric two-wheelers: 5%
The 56th GST Council especially stated that the higher 40% rate applies only when engine capacity exceeds 350cc.
So a motorcycle with an engine capacity of exactly 350cc or less falls under the 18% slab.
| Vehicle Type | Engine Capacity | Old Rate | New Rate | Effective Date |
| Petrol two-wheeler | Up to and including 350cc | 28% | 18% | 22 Sept 2025 |
| Petrol two-wheeler | Above 350cc | 28% + 3% cess | 40% | 22 Sept 2025 |
| Electric two-wheeler | Not applicable | 5% | 5% | No change |
What Changed After the September 2025 GST Reform?
Well, before the reform, motorcycles usually attracted 28% GST, while motorcycles above 350cc also attracted a 3% compensation cess, taking their effective indirect tax rate to 31%.
From 22 September 2025, the structure changed.
Bikes up to 350cc moved to 18% GST, while motorcycles above 350cc moved to a flat 40% GST rate.
The separate compensation cess on these higher-capacity motorcycles was removed as part of the revised structure.
In easy words, everyday commuter motorcycles received a tax cut, while higher-capacity motorcycles moved to the special 40% rate.
How Much GST Do You Pay on Bikes Under 350cc?
Now, for a motorcycle with an engine capacity of 350cc or less, GST is 18%.
This covers many of India's popular commuter bikes and scooters, including models such as the Hero Splendor, Honda Activa, Bajaj Pulsar 150 and several motorcycles in the 300–350cc category.
So, if you're searching for the GST on Activa, GST on Splendor or GST on a 350cc bike, the applicable GST rate is 18%, provided the vehicle falls within the specified engine-capacity limit.
The GST Council has also explicitly stated that exactly 350cc qualifies for the 18% rate.
How Much GST Do You Pay on Bikes Above 350cc?
Motorcycles with an engine capacity above 350cc attract somewhere around 40% GST.
This category has higher-capacity motorcycles such as the Royal Enfield Interceptor 650 and Continental GT 650, along with many Harley-Davidson and other premium motorcycles.
The change can have a noticeable effect on prices also.
For example, suppose the taxable value of a motorcycle before GST is ₹3.2 lakh:
- At the old 31% tax incidence: ₹99,200 in GST and cess
- At the new 40% GST rate: ₹1,28,000
- Difference: ₹28,800
The actual change in showroom price may vary because manufacturers and dealers can revise base prices, discounts and other charges.
Note: Models such as the Royal Enfield Meteor 350 use an engine below the 350cc threshold and therefore should not be treated as an above-350cc motorcycle simply because “350” appears in the model name.
What Is the GST Rate on Electric Two-Wheelers?
The GST rate on electric two-wheelers is 5%. This rate did not change with the September 2025 motorcycle GST restructuring.
Electric vehicles have a lower GST rate than petrol motorcycles as part of India's tax policy supporting cleaner mobility and EV adoption. CBIC has also clarified that electrically operated vehicles attract 5% GST whether or not a battery pack is fitted to the vehicle.
Unlike petrol motorcycles, the GST slab for an electric two-wheeler is not decided by engine capacity.
So whether you're buying a small city scooter or a more powerful electric motorcycle, the vehicle itself usually remains under the 5% EV GST rate.
Planning to go electric? Use MyMotor to find EV charging stations near you before you buy.
Related reading: EV charging in India: how to find a charging station before you travel
How Do You Calculate GST on a Bike's Price?
Here the basic formula is:
GST amount = (Taxable value of the bike × GST rate) ÷ 100
One important distinction: the ex-showroom price shown to a retail buyer usually already includes applicable GST. So don't add another 18% or 40% to an advertised GST-inclusive ex-showroom price. GST is calculated on the taxable value. Your final on-road price can then include other costs such as registration, road tax and insurance.
Worked Example - Bike Under 350cc
Suppose the taxable value of a bike before GST is ₹1,00,000.
- GST at 18%: ₹1,00,000 × 18% = ₹18,000
- Price including GST: ₹1,00,000 + ₹18,000 = ₹1,18,000
Road tax, registration and insurance may then affect the final on-road price.
Worked Example: Bike Above 350cc
Suppose the taxable value of a motorcycle before GST is ₹2,00,000.
- GST at 40%: ₹2,00,000 × 40% = ₹80,000
- Price with GST: ₹2,00,000 + ₹80,000 = ₹2,80,000
Under the earlier 28% GST + 3% cess structure, the tax incidence would have been 31%, or ₹62,000 on the same ₹2 lakh base. The new structure therefore represents an additional ₹18,000 in this simplified example.
What Is the HSN Code for Bikes and Two-Wheelers?
The main HSN code for motorcycles and motorised two-wheelers is 8711. Motorcycle parts and accessories are usually classified separately under HSN 8714.
| Category | HSN Code |
| Motorcycles, mopeds and motorised two-wheelers | 8711 |
| Parts and accessories of motorcycles | 8714 |
The exact classification of an individual component can depend on what the product is, so businesses should check the applicable HSN entry rather than just assuming every accessory receives the same tax treatment.
Does GST Apply to Bike Insurance, Spare Parts & Accessories?
Yes, but GST on bike insurance is separate from GST charged on the motorcycle itself.
Motor insurance usually falls under taxable insurance services at 18% GST, subject to applicable rules and specific exceptions.
This means a reduction in GST on a sub-350cc motorcycle does not automatically reduce the GST rate on its insurance premium.
Bike parts and accessories are classified separately from the motorcycle itself, commonly under HSN 8714 or another applicable HSN depending on the item.
Because classification matters, it is better to check the HSN and current rate for the specific spare part rather than applying the bike's 18% or 40% rate to every accessory.
Buying a new bike? You can compare bike insurance quotes from multiple insurers and see the premium with GST included before you pay.
Want to understand the other numbers on your insurance quote? Read our guides on what IDV means in bike insurance and what affects your bike insurance premium.
How Has GST on Bikes Changed Over the Years?
Bike taxation in India has changed considerably over the years.
| Period | Tax Structure |
| Before July 2017 | Excise duty, VAT and other applicable taxes |
| July 2017–Sept 2025 | Usually 28% GST; >350cc motorcycles also attracted 3% compensation cess |
| From 22 Sept 2025 | 18% up to 350cc, 40% above 350cc, 5% for electric two-wheelers |
When GST was introduced in 2017, motorcycles were placed in the 28% slab. Higher-capacity motorcycles above 350cc also attracted a 3% compensation cess.
The September 2025 reform changed that structure significantly.
Smaller motorcycles moved to 18%, motorcycles above 350cc moved to 40%, while electric two-wheelers continued at 5%.
How Does GST Affect the Final Price You Pay for a Bike?
The impact of the new GST on bikes in India is fairly direct: motorcycles up to 350cc benefit from a lower GST rate, higher-capacity motorcycles face a higher rate, and electric two-wheelers continue at 5%.
But GST isn't the only number that decides how much you finally pay.
Your on-road bike price can also include:
- Road tax
- Registration charges
- Insurance
- Other applicable dealer or statutory charges
Road tax and registration-related costs can vary by state, so two buyers purchasing the same motorcycle in different states may end up with different on-road prices.
Related reading: Road tax on bikes: how it is calculated and new bike insurance: what to know before you buy
Financing your purchase? The bike loan EMI calculator shows what your monthly payment looks like after GST and on-road costs. After registration, you can look up your bike's details anytime through RC details on MyMotor.
Once your bike is on the road, MyMotor helps you manage important vehicle information, from checking pending challans to keeping track of documents and insurance in one place. Download the MyMotor app to get reminders before your insurance expires.
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