Big Bikes May Get Costlier: Centre Proposes 40% GST on Motorcycles Above 350cc

India’s automobile taxation framework is likely to see a major overhaul, with the Centre proposing a restructuring of the Goods and Services Tax (GST). According to the draft reform, motorcycles with engine capacities of 350cc and above could soon attract a special GST rate of 40%, up from the current effective rate of 31%. The proposal, aimed at simplifying the tax structure and removing classification disputes, will be tabled at the GST Council meeting on September 3–4. If approved, the move is expected to make big bikes and premium motorcycles significantly more expensive for buyers in India.

Currently, motorcycles are taxed under a uniform GST slab, but industry experts say frequent classification disputes—especially between standard and premium segments—have led to calls for a clearer framework. The proposed 40% slab for motorcycles above 350cc could affect popular models from brands like Royal Enfield, Harley-Davidson, Triumph, Kawasaki, and KTM. While the industry is awaiting clarity, enthusiasts fear that the higher tax burden may impact affordability in the growing premium motorcycle segment. Manufacturers, however, believe that a simplified tax structure could provide long-term benefits by reducing ambiguity and compliance hurdles.

The final decision will rest with the GST Council, which is expected to deliberate on the proposal during its early September meeting.