GST slashed to 18% on most vehicles, big bikes and SUVs now pricier: Details inside
Two-wheelers up to 350cc, including bestsellers like the Honda Shine, Yamaha FZ, TVS Apache, and Bajaj Pulsar, will also benefit from the lower tax. A 10% reduction on a ₹1 lakh bike could mean a savings of ₹10,000.
- Sep 3, 2025,
- Updated Sep 3, 2025 10:53 PM IST
India’s latest GST reform slashes tax rates on most cars and two-wheelers from 28% to 18% starting September 22—but premium buyers could pay more as high-end models move into a new 40% bracket.
Prices for entry-level and mid-size vehicles are set to drop sharply following the GST Council’s decision to lower the Goods and Services Tax on most automobiles. Small cars like the Maruti Suzuki Alto, Hyundai Grand i10, and Tata Tiago—typically priced between ₹5–7 lakh—will see prices dip by 8–10%, cutting costs by as much as ₹70,000.
Two-wheelers up to 350cc, including bestsellers like the Honda Shine, Yamaha FZ, TVS Apache, and Bajaj Pulsar, will also benefit from the lower tax. A 10% reduction on a ₹1 lakh bike could mean a savings of ₹10,000.
But the tax break comes with a caveat: luxury cars, large SUVs, and motorcycles above 350cc may now attract a GST rate of up to 40%. This shift could push prices higher for models like the Royal Enfield 650cc, KTM 390, and Harley Davidson, with expected hikes of 10–12% or more in their on-road prices.
A ₹3.6 lakh Royal Enfield 650, for instance, could now cross the ₹4 lakh mark. In contrast, the Classic 350, which remains under the 350cc threshold, may drop from ₹2.25 lakh to ₹2.05 lakh. Mid-size sedans priced around ₹15 lakh may also benefit slightly, with a 3–5% price cut translating to ₹45,000–₹75,000 in savings.
While budget-conscious buyers will benefit most from the GST cut, the move could curb enthusiasm in the premium segment. The reform, effective September 22, aims to make personal mobility more affordable for the aspirational middle class while continuing to extract higher tax from luxury consumption.
India’s latest GST reform slashes tax rates on most cars and two-wheelers from 28% to 18% starting September 22—but premium buyers could pay more as high-end models move into a new 40% bracket.
Prices for entry-level and mid-size vehicles are set to drop sharply following the GST Council’s decision to lower the Goods and Services Tax on most automobiles. Small cars like the Maruti Suzuki Alto, Hyundai Grand i10, and Tata Tiago—typically priced between ₹5–7 lakh—will see prices dip by 8–10%, cutting costs by as much as ₹70,000.
Two-wheelers up to 350cc, including bestsellers like the Honda Shine, Yamaha FZ, TVS Apache, and Bajaj Pulsar, will also benefit from the lower tax. A 10% reduction on a ₹1 lakh bike could mean a savings of ₹10,000.
But the tax break comes with a caveat: luxury cars, large SUVs, and motorcycles above 350cc may now attract a GST rate of up to 40%. This shift could push prices higher for models like the Royal Enfield 650cc, KTM 390, and Harley Davidson, with expected hikes of 10–12% or more in their on-road prices.
A ₹3.6 lakh Royal Enfield 650, for instance, could now cross the ₹4 lakh mark. In contrast, the Classic 350, which remains under the 350cc threshold, may drop from ₹2.25 lakh to ₹2.05 lakh. Mid-size sedans priced around ₹15 lakh may also benefit slightly, with a 3–5% price cut translating to ₹45,000–₹75,000 in savings.
While budget-conscious buyers will benefit most from the GST cut, the move could curb enthusiasm in the premium segment. The reform, effective September 22, aims to make personal mobility more affordable for the aspirational middle class while continuing to extract higher tax from luxury consumption.