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The new GST regime, effective from September 22, has created a stark divide in the twowheeler market, rewarding smaller bikes while hitting big motorcycles with a hefty tax increase.

For small cars and twowheelers under 350 cc, which account for over 95% of the market, the news is welcome. Petrol, LPG, CNG, and hybrid cars with engines up to 1,200 cc, diesel cars up to 1,500 cc, and vehicles shorter than 4,000 mm will now attract an 18% GST, down from as high as 31% (including cess). SUVs and luxury cars see a modest reduction to 40%, while electric vehicles remain at 5%. Sub350 cc motorcycles will also benefit, seeing their GST fall from 28% to 18%, making them more affordable for firsttime buyers and daily commuters.

Big bikes hit with higher taxes

But the bigger bikes — motorcycles with engines 350 cc and above — are facing a sharp 40% GST, up from 28%. Popular models from Royal Enfield, KTM, Hero MotoCorp, Bajaj, Triumph, and HarleyDavidson will now cost significantly more. Rough calculations suggest price hikes of around Rs 25,000 for bikes like the Himalayan and Guerrilla, and up to Rs 40,000 for higherend models such as the Interceptor and BSA Gold Star. Among the impacted bikes are nine Royal Enfield models — the Classic 650, Scram 440, Bear, Guerrilla, Shotgun, Himalayan, Super Meteor, Interceptor, and Continental GT. KTM’s 390 series, Bajaj’s Pulsar NS400z, Triumph’s Speed 400, and HarleyDavidson’s X440 also fall into the higher tax slab. Models narrowly avoiding the 40% GST include Royal Enfield’s Classic 350, Hunter, Bullet, Meteor, and Honda’s H’ness CB350 and CB350RS, all under 350 cc.

Industry reaction and outlook

Industry experts call the move a puzzling anomaly. “This segment, though niche, has been growing strongly thanks to aspirational consumers and international brands,” Abhishek Jain, partner and national head of indirect tax at KPMG India, told FE. “The hike may slow premiumisation, while sub350 cc models gain traction. Policymakers are treating larger bikes as luxury goods, even though they play a role in tourism, lifestyle, and exports.”

Royal Enfield’s Siddhartha Lal had earlier urged policymakers for a uniform 18% GST across all motorcycles. He had warned that a split tax system could hurt India’s global position in the big bike market and stall investment. While most of Royal Enfield’s sales come from sub350 cc models, motorcycles above 350 cc account for roughly 9% of its volumes.

Anupam Thareja, MD and cofounder of Classic Legends, which owns Jawa, Yezdi, and BSA, welcomed the GST cut for smaller bikes but acknowledged the heavier burden on the 652cc BSA Gold Star. “We accept it as the hallmark of progressive taxation,” he said. Reflecting on how the GST reform has positively impacted Jawa and Yezdi brands this time, Thareja told PTI in an interview, “The 1995 regulation made sure that Yezdi and Jawa fade away, and this 2025 regulation has ensured that we will shine like nobody else… It is serendipity that the two main engine platforms — 300cc and 349 cc —  fall under the category and get the benefit (of GST reduction).”

Despite being smaller than the commuter segment, big bikes have grown faster than the overall twowheeler market. Urban professionals and younger buyers upgrading from entrylevel bikes have fuelled demand. Royal Enfield sold almost 150,000 bikes above 350 cc last year, Bajaj matched that, and Triumph sold nearly 70,000 in two years. Experts say the GST hike may slow this momentum, though premium buyers may remain less sensitive to the price increase.

The new GST structure clearly favours small motorcycles and firsttime buyers, while aspirational riders of bigger machines face a steeper ride ahead.