The GST Council last week approved new tax rates for vehicles, effective Sept. 22. Among other things, this move is set to make small bikes and cars more affordable, while luxury and performance models will attract higher taxes.
Following the Goods and Services Tax (GST) Council’s decision to introduce reforms in GST slabs, two-wheelers with an engine capacity below 350cc will now be taxed at 18%. This marks a significantly lower tax rate compared to 28% earlier. This change is expected to heavily benefit a majority of the Indian two-wheeler makers.
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However, larger motorcycles above 350cc will be taxed at 40%. This includes premium bikes in the 450cc and 650cc range. Similarly, cars will also see a tax revision. Smaller cars will now attract 18% GST, while larger vehicles and racing cars will fall under the 40% bracket.
Experts believe that this move will end the slump in two-wheeler demand. To attract buyers, automakers have also passed on maximum benefits to customers, aiming to boost sales during the upcoming festive period.
As a result, the prices of several bikes, scooters and other two-wheeler models will see a significant reduction starting Sept. 22.
Scooter Price After GST Rate Cut
For instance, the Honda Activa 125 (124cc), currently priced at Rs 81,000, is expected to drop to Rs 74,250. TVS Motor Company has also announced that it will pass on the benefits to customers after the GST rate cuts. The TVS bikes across different models will now become cheaper by up to Rs 22,000. The TVS Jupiter 125 (124cc) is expected to be available at Rs 70,667, compared to Rs 77,000 currently. The price for TVS NTORQ 125 may fall from Rs 85,000 to Rs 77,778.
The Honda Dio 125 is expected to become cheaper by Rs 6,222, with the final price declining to Rs 65,778. The Suzuki Burgman Street 125 could see a cut of Rs 6,444, bringing its price down to Rs 75,556.
A Look At New Expected Prices Of Popular Scooters
| Scooter Model | Engine Capacity | Current Price (28% GST) | Expected Price (18% GST) | Expected Price Cut |
|---|---|---|---|---|
| Honda Activa 125 | 124cc | Rs 81000 | Rs 74250 | Rs 6750 |
| TVS Jupiter 125 | 124cc | Rs 77000 | Rs 70667 | Rs 6333 |
| Suzuki Access 125 | 124cc | Rs 79500 | Rs 72889 | Rs 6611 |
| Hero Maestro Edge 125 | 124cc | Rs 76500 | Rs 70111 | Rs 6389 |
| TVS NTORQ 125 | 124.8cc | Rs 85000 | Rs 77778 | Rs 7222 |
| Honda Dio 125 | 124cc | Rs 72000 | Rs 65778 | Rs 6222 |
| Suzuki Burgman Street 125 | 124cc | Rs 82000 | Rs 75556 | Rs 6444 |
| Yamaha Fascino 125 | 125cc | Rs 76000 | Rs 70667 | Rs 5333 |
| Hero Destini 125 | 124cc | Rs 74500 | Rs 69111 | Rs 5389 |
| Aprilia SR 125 | 124cc | Rs 95000 | Rs 88148 | Rs 6852 |
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