GST on Bikes and Two-Wheelers in India: Rates, HSN Codes & Buyer Insights

Buying a bike or scooter is one of the most popular transport choices for Indian consumers, thanks to its affordability and convenience. But before you hit the road, it’s important to understand the taxes involved—especially the Goods and Services Tax (GST). This blog breaks down the GST rates on two-wheelers in India, including electric bikes, HSN codes, and how GST affects your total cost.

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    GST Rates

    What is the GST Rate on Bikes in India?

    All petrol or diesel-powered two-wheelers—whether a scooter, bike, or motorcycle—are taxed at a standard GST rate of 28%.

    However, electric bikes and scooters enjoy a lower rate of just 5%, thanks to government efforts to promote green mobility.

    Vehicle Type Engine Capacity GST Rate
    Petrol/Diesel Bikes All capacities 28%
    Electric Bikes/Scooters All battery capacities 5%

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    HSN Code for Two-Wheelers

    Bikes and scooters fall under HSN Code 8711, which covers all motorcycles (with or without side-cars), mopeds, and electric two-wheelers.

    Product Description HSN Code GST Rate
    Petrol/Diesel Two-Wheelers 8711 28%
    Electric Two-Wheelers 8711 5%

    Retailers and manufacturers must use this code on invoices for accurate GST filings.

    GST Impact on Two-Wheeler Prices

    Let’s look at an example:

    Buying a 125cc petrol scooter worth ₹90,000

    • GST @28% = ₹25,200
    • Total Invoice = ₹90,000 + ₹25,200 = ₹1,15,200

    Buying an electric scooter worth ₹1,00,000

    • GST @5% = ₹5,000
    • Total Invoice = ₹1,00,000 + ₹5,000 = ₹1,05,000

    That’s a tax savings of ₹20,000+ when you choose electric!

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    Why the Difference in Tax Rates?

    • Petrol and diesel bikes fall under the luxury category, hence taxed at 28%.
    • Electric bikes are part of the green initiative and are incentivized through a reduced GST rate of 5%, along with subsidies under the FAME-II scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles).

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    Input Tax Credit (ITC) Rules for Two-Wheelers

    In most cases, ITC is not allowed for two-wheeler purchases—even if the buyer is a GST-registered business.

    Exceptions where ITC is allowed:

    • When the vehicle is used for resale (e.g., bike showrooms)
    • When used for transporting goods or passengers (e.g., delivery fleets, rental services)
    • For training purposes (e.g., driving schools)

    GST on Bike Accessories

    Accessories and spare parts are taxed separately and usually attract GST between 18% and 28%.

    Item GST Rate
    Helmets 18%
    Bike covers, seat covers 18%
    Tyres, tubes 28%
    Engine parts, mirrors 28%

    Make sure to ask for a tax invoice when buying accessories to know the breakdown.

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    Final Thoughts

    Understanding the GST on bikes and scooters helps buyers make informed financial decisions. While petrol-powered two-wheelers attract 28% GST, switching to electric alternatives offers major tax and environmental benefits. Whether you’re buying for personal use or business, make sure to ask for proper invoices and check the tax components to know what you’re paying for.

    Frequently Asked Questions

    • What is the GST rate on two-wheelers in India?
      28% for petrol/diesel bikes and 5% for electric two-wheelers.
    • Is GST applicable on second-hand bike purchases?
      If purchased from a dealer, GST under the margin scheme may apply. Individual-to-individual sales are exempt.
    • Can I claim ITC on a bike bought for business?
      Generally no, unless used for delivery, resale, or passenger services.
    • Is GST applicable on bike loans or EMIs?
      GST is not charged on the EMI itself, but processing fees by banks may attract 18% GST.
    • Are electric bikes cheaper because of lower GST?
      Yes, plus they may be eligible for government subsidies, making them more affordable overall.
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