New Delhi — The Indian government has implemented a 40% Goods and Services Tax (GST) on motorcycles with engine capacities above 350cc, a move that has sparked concern among riders and industry stakeholders.
The high tax rate, applied to premium and high-capacity motorcycles, has been justified by authorities as a measure targeting luxury vehicles. Experts note that bikes above 350cc are often categorized as leisure or aspirational purchases rather than essential transportation.
Industry insiders warn that the new tax could significantly increase the on-road cost of popular motorcycles. For instance, a bike priced at ₹3 lakh may now cost closer to ₹4.5 lakh after GST, registration, and insurance. This price hike could push prospective buyers toward lower-capacity bikes under the 350cc threshold.
The measure is expected to affect domestic manufacturers such as Royal Enfield, whose models above 350cc fall under the new tax slab. Foreign brands, including KTM, Kawasaki, and Harley-Davidson, are also likely to feel the impact, potentially slowing expansion plans in India.
Motorcycle enthusiasts argue that the classification is excessive, noting that in many countries, a 350cc bike is considered entry-level rather than luxury. “The higher GST makes it difficult for young riders to afford premium motorcycles,” said a spokesperson for a riders’ association.
Industry groups have called for a rationalized tax structure, suggesting a lower GST for bikes above 350cc to encourage domestic production, attract foreign investment, and boost tourism through motorcycle travel and adventure.
The government has not yet indicated whether it plans to review the GST slab. Meanwhile, riders and manufacturers continue to assess the financial impact of the 40% tax on India’s growing premium motorcycle segment.
