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Bike GST New Update 2025: Honda Prices Cut

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In September 2025, the Goods and Services Tax Council sat down with an important agenda. They wanted to revise the GST tax rates, keeping in mind the long-term growth of our nation. Various GST rates such as on airplanes, accommodation, dining, and luxury shopping, were discussed. GST on transportation was also taken into account. As a result, the Goods and Services Tax on buying motorcycles was revised.

Small bikes, that is, with engines less than 350 cc, were made cheaper and more affordable. On the other hand, larger motorcycles with heavier engines of more than 350 cc were made costlier. Hence, every brand selling two-wheelers was impacted. One of India’s favourite and most-relied on names, Honda is also a part of the list.

GST Rates on Motorcycles and Scooters in 2025

The main goal behind revising the Goods and Services was simple. Encourage more people to buy two-wheelers and have accessible transportation. In a country like India, where many people work for a paycheck, reasonable taxation becomes much more important.

Keeping this in mind, the GST bike rate was reduced from 28 per cent to 18 per cent on bikes less than 350 cc. Heavier bikes, with bigger engines (>350cc), have become more expensive. The idea behind this could be to encourage people to make affordable choices. Earlier, these were taxed at 31%, including 3% Cess, and now, the taxation has increased by a whopping 9%, bringing it to 40%.

Interestingly, the Indian Government is looking to encourage more people to start using Electric Vehicles. EVs are much more cost-effective in the long run, and safer for the environment too. In order to attract more people towards electric two-wheelers, the GST rate on these is the lowest. It is just 5%, and remains unchanged.

Price Drop: Honda Bikes and Scooters After GST Cut

Honda Motorcycle & Scooter India (HMSI) has a vast range of two-wheelers. It includes various bikes and scooters. Keeping in mind the new taxation, HMSI has applied tax benefits, offering savings of up to Rs. 18,800. The sum obviously depends on the model.

Let us see how much tax reduction you’ll get across Honda's 350cc lineup:

Impact of GST on the Two-Wheeler Market

• Boost in demand:

Various analysts project a 5–6% growth in two-wheeler sales in the financial year of 2026. The main reason for the increase in sales is expected to be purchases driven by price cuts and the festive season.

• Affordability for middle and lower-income buyers:

New GST rates are offering a reduction in Honda two-wheelers of up to Rs. 18,800. This cost-cutting makes bikes and scooters more accessible for price-sensitive consumers.

• Positive impact on rural and semi-urban markets:

With lower costs, it is only right to assume that there is going to be penetration of scooters and motorcycles in rural parts of the country.

• Support for EV adoption:

The GST on electric two-wheelers remains at 5%, keeping them attractive and aligned with green mobility goals.

• Simplified tax structure:

Bike parts GST rate is now uniform. This means multiple HSN codes have been rationalised. It is now easier for manufacturers, sellers, and buyers to be in compliance with the code.

Conclusion

The GST reforms introduced in September 2025 mark a significant milestone for India’s two-wheeler industry. By reducing the GST on motorcycles under 350cc to 18%, the government has made everyday commuting more affordable. Brands like Honda have passed on these benefits to customers. This step would probably drive higher demand, especially in rural and semi-urban markets. Bigger bikes have gotten more expensive, and two-wheeler EVs remain unchanged. Overall, the reform balances affordability, sustainability, and long-term growth in the Indian economy.

Frequently Asked Questions on GST and Two-Wheelers

1. How has GST affected two-wheeler prices in India?

The prices of two-wheelers with engines less than 350cc have gone down, whereas bikes with more than 350cc engines have risen. Prices of EVs remain unaffected.

2. What is the GST rate on bikes and scooters in 2025?

For two-wheelers less than 350cc, the new GST rate is 18%.
For two-wheelers more than 350 cc, the new GST rate is 40%.
For electric scooters or bikes, the taxation is set at 5%.

3. Why are Honda two-wheelers seeing the biggest price cuts?

The Honda two-wheelers are seeing the biggest price cuts in the industry because it is a customer-centric brand that has pricing and specifications needed by Indian consumers. For all its two-wheeler vehicles less than 350cc, the tax cut of up to Rs. 18,800 is possible.

4. Does the GST reduction apply to electric scooters too?

No, the GST rate on electric scooters has not reduced. It was 5% earlier, and is 5% now as well.

5. Will two wheeler dealers benefit from the GST change?

Yes, the two wheeler dealers will benefit from the GST change. More people will now be looking forward to purchasing scooters and motorcycles, increasing the revenue of dealers.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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