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Motorcycles with engine capacities up to 350 cc are now placed in the 18 per cent slab – down from the previous 28 per cent
India’s new GST reform has arrived as a festival-season bonanza, and this time, the spotlight shines brightly on the automobile sector. Branded as a “next-gen” overhaul, the revised tax rates are all set to reduce prices across multiple vehicle categories – making mobility more affordable for individual buyers as well as businesses.
A big winner in this reform is the hybrid car segment. Compact petrol, diesel, LPG and CNG hybrids that were earlier subject to 28 per cent GST are now taxed at just 18 per cent. Covering vehicles under 1500 cc and up to 4,000 mm in length, the decision makes hybrids a more compelling choice for Indian buyers who want efficiency without committing fully to electric solutions.
Two-wheelers have also seen a remarkable drop in GST. Motorcycles with engine capacities up to 350 cc are now placed in the 18 per cent slab – down from the previous 28 per cent. The new tax slab lowers the entry barrier for young riders and middle-class families looking to upgrade, potentially giving the mass two-wheeler market a new surge in demand.
Particularly the 100-350 cc mass market focussed motorcycles and scooters in the 100 to 150 cc segments get vastly benefitted as volume-based brands like Hero MotoCorp, Honda, TVS, Bajaj, Yamaha and Suzuki will witness their two-wheelers facing price drops. As for Royal Enfield, its 350 cc entry-level middleweight capacity J-platform motorcycles will absorb the tax slash benefits too.
The Classic 350, Hunter 350, Meteor 350 and Bullet 350 are amongst the ones that will see price drops – possibly up to Rs. 25,000. Meanwhile, the motorcycles above 350 cc capacity have their prices increase as the GST slab goes up from 31 to 40 per cent. The three-wheeler category – integral to last-mile connectivity in both cities and rural belts – benefits as well. The GST cut from 28 per cent to 18 per cent will reduce purchase costs, helping drivers save on initial investment while keeping fares competitive.
On the commercial side, goods transport vehicles too have been placed in the reduced 18 per cent bracket. By lowering the cost of acquiring trucks and vans, logistics companies can expand fleets more economically which in turn reduces freight charges. The government expects this to ease supply chain expenses, indirectly benefiting consumers through cheaper goods.
Beyond automobiles, the reform also extends relief to households and farmers with lowered taxes on essentials, healthcare items, appliances, and educational supplies. Yet, it is in the auto space where the effect is likely to be felt fastest – given India’s rising demand for personal mobility and the country’s dependence on efficient freight movement.
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