--- title: "New GST on Bikes 2026: 18% / 40% Rate on Two Wheelers & Motorcycles" description: "New GST rate on bikes in 2026 is 18% on bikes under 350cc and 40% on bikes above 350cc. Use Busy to auto-apply the correct GST on every invoice." canonical: "https://busy.in/gst-rates/bikes/" author: "Susheel Kumar" published: "2025-04-24T09:12:24.000Z" category: "GST Rates" --- - New GST rates in India for bikes effective from Sep 22, 2025, are 40% for petrol/diesel bikes over 350cc, 18% for those 350cc or below, and 5% for electric bikes. - The old GST rate was 28% for all petrol/diesel two-wheelers, while electric bikes remained at 5% to promote green mobility. - HSN Code 8711 is used for all two-wheelers, including bikes and scooters, for GST filings. - Electric bikes offer significant tax savings compared to petrol bikes, with a GST of 5% versus 28%. # New 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**](https://busy.in/hsn/) , and how GST affects your total cost. ## **New GST on Bikes in India** Two-wheelers such as **motorcycles, scooters, and electric bikes** fall under the **Goods and Services Tax (GST)** system in India. The applicable GST rate depends on the **engine capacity and type of vehicle**, such as petrol, diesel, or electric. With the **GST changes effective after 22 September 2025**, the taxation structure for bikes has been updated to differentiate between **high-capacity motorcycles and smaller two-wheelers**, while **electric bikes continue to benefit from a lower GST rate** to encourage eco-friendly transportation. **No compensation cess applies to bikes under this structure.** ## GST Rate on Bikes in India | Vehicle Type | Engine Capacity | GST Rate (After 22 Sept 2025) | GST Rate (Before 22 Sept 2025) | | --- | --- | --- | --- | | Petrol/Diesel Bikes | ≤ 350cc | 18% | 28% | | Petrol/Diesel Bikes | \> 350cc | 40% | 28% | | Electric Bikes / Scooters | All battery capacities | 5% | 5% | ## HSN Code for Bikes and Scooters All motorcycles, scooters, and mopeds fall under **HSN Code 8711**, which covers: - Petrol and diesel motorcycles - Scooters and mopeds - Electric two-wheelers | Product Description | HSN Code | GST Rate | | --- | --- | --- | | Petrol/Diesel Two-Wheelers | 8711 | 18% – 40% | | Electric Two-Wheelers | 8711 | 5% | Manufacturers, dealers, and retailers must use the **correct HSN code on invoices and GST filings** to ensure proper tax reporting. Live Demo Available Today ## Track Chassis Warranty Easily With BUSY Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **Input Tax Credit (ITC) Rules for Two-Wheelers** In most situations, **Input Tax Credit (ITC) is not allowed on two-wheeler purchases**, even if the buyer is GST registered. However, ITC can be claimed in certain cases: - When the vehicle is **purchased for resale** (e.g., bike dealers or showrooms) - When used for **transporting goods or passengers** (such as delivery fleets or rental services) - When used for **training purposes**, such as driving schools These exceptions allow businesses to **claim GST credit on the purchase of motorcycles used in taxable operations**. ## GST on Bike Accessories and Spare Parts Bike accessories and spare parts are **taxed separately from the motorcycle itself** under GST. Under the revised GST rationalisation, **most bike accessories and components now attract 18% GST**. | Bike Accessory / Part | GST Rate (After 22 Sept 2025) | | --- | --- | | Helmets | 18% | | Bike covers, seat covers | 18% | | Tyres and tubes | 18% | | Engine parts, mirrors | 18% | Get a Free Demo – [Best Billing and Invoicing Software](https://busy.in/accounting-software/invoicing-and-gst-billing/) ## **How to Calculate GST on Two-Wheelers** Let’s look at an example: **Buying a 125cc petrol scooter worth ₹90,000** - **GST @18% = ₹16,200** - **Total Invoice = ₹90,000 + ₹16,200 = ₹1,06,200** **Buying an electric scooter worth ₹1,00,000** - **GST @5% = ₹5,000** - **Total Invoice = ₹1,00,000 + ₹5,000 = ₹1,05,000** **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) ## **Final Thoughts** Understanding the GST on bikes and scooters helps buyers make informed financial decisions. While petrol-powered two-wheelers attract 18% 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. ## About the author **Susheel Kumar** I am a Chartered Accountant with over 20 years of experience and a finance content writer. I focus on educating people about finance and taxation. I have written many blog posts on finance, taxation, trading, and investment on the BUSY website. My goal is to increase financial understanding by making complex concepts easier to grasp and to support educational programs in India. ## Frequently asked questions ### What is the GST rate on two-wheelers in India? The GST rate on two-wheelers depends on engine capacity and type. Petrol or diesel bikes up to 350cc attract 18% GST, while bikes above 350cc attract 40% GST. Electric bikes and scooters are taxed at only 5% GST. ### Is GST applicable on second-hand bike purchases? GST may apply if the bike is purchased from a GST-registered dealer under the margin scheme, where tax is charged only on the dealer’s profit margin. However, individual-to-individual sales are generally not subject to GST. ### Can I claim Input Tax Credit (ITC) on a bike bought for business? In most cases, ITC is not allowed on two-wheeler purchases. However, ITC may be claimed if the bike is used for resale, delivery services, passenger transportation, or driving training businesses. ### Is GST applicable on bike loans or EMIs? GST is not charged on the loan EMI or principal repayment. However, bank processing fees, documentation charges, and other service charges may attract 18% GST. ### Are electric bikes cheaper because of lower GST? Yes. Electric bikes attract only 5% GST, which is significantly lower than petrol or diesel bikes. 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