TL;DR
A recent GST revision has reduced tax on motorcycles under 350cc to 18% while increasing it to 40% for those above 350cc, causing a strategic shift in India's mid-capacity motorcycle market.
India's mid-capacity motorcycle segment is currently experiencing a significant structural shift, driven by a Goods and Services Tax (GST) overhaul implemented in September last year. This revision has created a notable pricing disparity across different engine categories. Motorcycles with an engine displacement of up to 350cc now attract a reduced GST of 18%, down from 28%.
Conversely, bikes exceeding 350cc, which previously faced a 31% tax (28% GST plus a 3% surcharge), are now subject to a substantially higher 40% GST. This places them in an ultra-luxury tax bracket, prompting manufacturers like Bajaj and Triumph to re-evaluate their product strategies. Industry insiders suggest that had Triumph fully absorbed the tax increase, the price difference for comparable 400cc models could have widened by nearly ₹50,000, impacting demand. Consequently, both Bajaj and Triumph are reportedly preparing to introduce new lineups of 350cc motorcycles as early as next month to leverage the lower tax slab.
