GST reforms 2025: What every two-wheeler buyer needs to know before purchasing
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In September 2025, the Indian government introduced key changes to the Goods and Services Tax (GST) that impact two-wheeler buyers. These reforms affect both small and large motorcycles, as well as electric vehicles (EVs). The new rates influence purchase prices and long-term affordability, making it essential for prospective buyers to understand the impact of GST on bikes and how these updates will affect their decisions.
This blog will break down the changes in GST for bikes and scooters, how they impact pricing, and whether now is the right time to buy. We’ll also cover bike insurance, an important aspect of protecting your new ride.
How GST reforms impact bike pricing
The 2025 GST reforms have led to significant changes in bike pricing. Here's how the new tax rates are reshaping the market.
Price drops for smaller bikes
The GST rate for bikes with engines under 350cc has decreased from 28% to 18%, making smaller bikes more affordable. This reduction results in savings of ₹5,000 to ₹12,000 on popular models like the Honda Dio 125 and Bajaj Pulsar.
Price increases for larger bikes
Bikes with engines over 350cc now face a higher GST rate of 40%, up from 31% (28% GST + 3% Cess). This price hike means models like the Royal Enfield Interceptor 650 and KTM Duke 390 could see an increase of ₹20,000 or more.
GST on electric bikes
Electric bikes continue to benefit from a low 5% GST, promoting cleaner, more sustainable transportation. This makes EVs an attractive option for those seeking long-term savings, especially with rising fuel prices.
Strategic buying decisions: Is now the right time to buy?
With the new GST reforms in place, many buyers are wondering whether now is the right time to purchase a new bike or wait for more favourable conditions. Let’s explore both sides.
Timing your purchase: Buy now or wait?
The upcoming festive season often sees a spike in two-wheeler sales. With the reduction in GST rates for smaller bikes, now may be the best time to purchase if you’re in the market for an affordable commuter bike. The price reduction can make a significant impact on your budget, especially when considering financing options.
For larger bikes, however, the price increase may give you pause. Although waiting may seem appealing, it’s unlikely that GST rates will go down again anytime soon. The key consideration here is whether you’re willing to absorb the price hike for a premium bike.
Long-term value: Will the tax cuts continue?
For those interested in smaller bikes, the GST cuts provide an opportunity to get better value for money. These changes may also reduce your bike’s long-term operating costs, making it an attractive option for buyers looking for affordability without sacrificing quality.
Understanding GST paperwork and compliance
When purchasing a bike, it’s essential to understand the paperwork and compliance requirements to avoid any issues down the line.
GST on bike purchases: What you need to know
If you're buying a new bike, the seller must issue a tax invoice for the transaction. This is a standard requirement for any registered seller. If the bike costs over ₹50,000, you’ll also need an e-way bill for transportation, which is required for all goods exceeding this value.
GST on bike spare parts and accessories
Bike parts also come with GST. These rates have been standardised, making it easier for both manufacturers and buyers. The HSN code for bikes and spare parts is 8711, which is the same across the industry. This simplification helps avoid confusion during purchases of accessories and replacements.
Updated GST rates for bikes and electric two-wheelers
Category / Engine Capacity | Earlier GST Rate | Revised GST Rate | HSN Code |
|---|---|---|---|
Engine below 350 cc | 28% GST | 18% GST | 8711 |
Engine above 350 cc | 28% GST + 3% Cess = 31% | 40% GST | 8711 |
Electric Two-Wheelers | 5% GST | 5% GST (No Change) | 8711 |
Conclusion
The 2025 GST reforms have brought both opportunities and challenges for two-wheeler buyers. While smaller bikes have become more affordable, larger bikes have seen prices rise due to higher GST rates. For buyers considering electric bikes, the low 5% GST rate makes these models a great choice for both cost savings and environmental impact.
Before making your purchase, don’t forget to secure your bike insurance to protect your new investment. If you're looking for a comprehensive insurance plan that suits your needs, Zuno offers a range of affordable and customizable options.
FAQs on GST for bikes and scooters in 2025
1. What is the GST rate on bikes in India for 2025?
- Bikes under 350cc: 18% GST
- Bikes over 350cc: 40% GST
- Electric bikes: 5% GST
2. Can I claim GST on my bike purchase?
- For personal use, GST is generally not claimable. However, businesses may be eligible for input tax credit (ITC) on bikes purchased for commercial purposes.
3. What is the GST HSN code for a motorcycle or scooter?
- The HSN code for bikes and scooters is 8711.
4. How has GST affected bike prices in India?
- GST cuts have reduced the cost of smaller bikes, while larger bikes have become more expensive due to higher GST rates.
5. Does GST apply to electric scooters too?
- Yes, the GST rate on electric scooters remains at 5%.
6. Will GST revisions impact bike insurance premiums?
- Changes to GST will not directly affect bike insurance premiums, but the value of your bike determines the coverage. Be sure to explore bike insurance options to protect your new ride.
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ARN: Zuno/Blog/DM/GST reforms 2025: What every two-wheeler buyer needs to know before purchasing/11/25/08
Disclaimer
Zuno General Insurance Limited does not assume any liability for actions taken based on the information contained in this blog. All insurance products and services are subject to the terms and conditions of the specific policy. Coverage and pricing may vary based on individual circumstances and eligibility.
