In a recent move, the government has streamlined the Goods and Services Tax (GST) structure, eliminating certain tax slabs. This initiative is set to influence the pricing of popular two-wheelers, including the Hero Splendor and Honda Activa.
The 56th GST Council meeting saw the removal of the 12% and 28% tax brackets, leaving mainly 5% and 18% slabs. These changes are scheduled to take effect from September 22, 2025.
For those considering a new motorcycle purchase, this development is significant. The updated GST rates will reshape the final cost of new bikes.
Motorcycles with engines below 350cc will benefit from a reduced GST rate, dropping from 28% to 18%. This will potentially lower the price of models such as the Bajaj Pulsar and Honda Activa.
For buyers seeking larger bikes (350cc and above), a 40% GST will apply, affecting models like Royal Enfield. Previously, these bikes incurred a 28% GST plus a cess, resulting in roughly 32% total tax. The cess has now been removed in favor of a flat 40% rate.
To illustrate, the Hero Splendor Plus, currently priced at ₹79,426 (ex-showroom Delhi), could see a price reduction of approximately ₹7,900 if the GST cut of about 10% is fully passed on. This would provide a significant benefit to consumers.
It is important to note that the on-road cost of a bike includes additional charges such as RTO fees, insurance, and other miscellaneous costs. Taking these into account, the on-road price of the Splendor Plus in Delhi reaches around ₹93,715. With the potential tax savings, owning a Splendor Plus and similar two-wheelers could become more economical in the future.