The recent amendments to the Goods and Services Tax (GST) structure are expected to lower the prices of several two-wheeler models, notably the Hero Splendor and Honda Activa. This follows decisions made at the 56th GST Council meeting.
The GST Council eliminated the 12% and 28% tax slabs, streamlining the tax system. The new rates, which come into effect on September 22, 2025, primarily involve 5% and 18% tax brackets.
Potential buyers should take note of how the new GST rates will influence the final cost of a new motorcycle.
Motorcycles with engine capacities under 350cc will benefit from a tax reduction. The GST on these bikes will be lowered from 28% to 18%. This reduction is anticipated to make popular models like the Bajaj Pulsar and Honda Activa more affordable.
However, bikes with engines larger than 350cc, such as Royal Enfield models, will be subject to a 40% GST. Previously, these bikes were taxed at approximately 32% due to a 28% GST and a cess. The cess has been eliminated in favor of the higher, flat rate.
To illustrate the savings, consider the Hero Splendor Plus. With an ex-showroom price of ₹79,426 in Delhi, a 10% GST reduction could potentially decrease the price by approximately ₹7,900. This would provide direct financial benefits to buyers.
Additional costs like RTO fees, insurance, and other charges must also be considered. Adding these to the ex-showroom price, the on-road price of the Splendor Plus in Delhi is approximately ₹93,715. With these tax changes, owning a Splendor and comparable two-wheelers could become more economical.