Mon Aug 18 05:50:00 UTC 2025: ## Two-Wheeler Prices Likely to Dip as Government Considers GST Cut Before Diwali

**New Delhi:** Good news for prospective two-wheeler buyers! The Indian government is reportedly considering a significant reduction in the Goods and Services Tax (GST) on motorcycles and scooters, potentially slashing prices just in time for Diwali.

According to sources, the GST on two-wheelers is likely to be reduced from the current 28-31% to a standard rate of 18%. Currently, petrol-powered two-wheelers attract a 28% GST, with an additional 3% cess levied on bikes exceeding 350cc, pushing the effective tax rate to 31%. This high tax burden has been a long-standing concern, making two-wheelers less affordable for the average consumer.

A report by BikeWale suggests that the government is planning to revamp the entire tax structure under “GST 2.0” before Diwali. This revamp could see the elimination of the 12% and 28% GST slabs, leaving only two: 5% for essential goods and 18% for standard goods. This would effectively bring two-wheelers under the 18% GST bracket.

The automobile sector has long advocated for a reclassification of motorcycles and scooters, arguing that they should be considered a necessity rather than a luxury item. The Society of Indian Automobile Manufacturers (SIAM) has been a vocal proponent of the 18% GST rate. Leading manufacturers like Hero MotoCorp and Honda (HMSI) have consistently emphasized that motorcycles are essential for the common person in India, not a luxury.

The move is expected to benefit consumers significantly, making bikes and scooters more accessible and affordable. Companies are also poised to benefit from increased sales, particularly in rural and middle-class markets. This potential increase in demand could also have a positive impact on the Indian economy, boosting market cash flow.

If implemented before Diwali, this GST reduction could make owning a two-wheeler a more attainable goal for many Indians. The resulting lower prices and increased sales would represent a win-win situation for the government, manufacturers, and consumers alike.

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