Eicher Motors-owned mid-size two-wheeler manufacturer Royal Enfield urged the government to consider a uniform GST rate for motorcycles, including the higher-capacity bikes, on Saturday, 30 August 2025, according to a social media post on LinkedIn.
The Current GST Structure
As multiple media reports note, the revised GST plan could reduce taxes on smaller-capacity bikes to 18%, while bigger motorcycles may face a higher rate.
At present, all automobiles in India fall under a 28% GST slab, along with an additional compensation cess that ranges from 1% to 22%, depending on the vehicle type, according to PTI.
A Uniform GST Rate?
Eicher Motors Chairman Siddhartha Lal stressed that Indian two-wheeler makers already dominate the global small-capacity motorcycle segment and are now steadily moving into the mid-capacity space.
Calling his statement an “urgent and heartfelt appeal,” Lal said lowering GST for sub-350cc bikes may improve accessibility, but raising rates for larger-capacity motorcycles would harm India’s position in the global market.
“To sustain this momentum, a uniform GST of 18% across all two-wheelers is critical. Lowering GST for <350cc will help broaden access, but raising GST for >350cc would damage a segment vital to India’s global edge,” he wrote on LinkedIn.
Concerns Over Higher Taxes on Big Bikes
Lal warned that differential GST rates could shrink India’s over-350cc motorcycle market, discouraging investment at a time when the country is competing globally.
He added that raising GST on larger motorcycles would bring in negligible revenue but could damage a segment that offers practical value to Indian consumers. “For Indian riders, these motorcycles are not luxury goods; they are efficient, affordable alternatives to cars, offering lower fuel use and maintenance — benefits that also help reduce India’s fuel imports,” he explained.
Currently, only about 1% of Indians own motorcycles above the 350cc category, highlighting the niche but strategic importance of this segment.
India’s Global Advantage
The Royal Enfield chief underlined that India is already ahead of China, Japan, Europe, and the US in two-wheeler sales. Moving to a uniform GST rate would reinforce this leadership and provide long-term stability for the sector.
Right now, India follows a four-tier GST system of 5%, 12%, 18%, and 28%. Lal believes a flat 18% rate for motorcycles would keep the industry competitive while expanding access for buyers.
