GST Impact on Cars and Bikes Prices 2025: What Gets Cheaper, What Gets Costlier

The Indian government has rolled out the biggest GST reform in a decade, effective September 22, 2025. For years, both cars and bikes were taxed at a steep 28% GST, with extra cess on SUVs and big motorcycles — making even entry-level mobility expensive.

Now, the new GST structure changes the game:

• 18% GST for small cars and two-wheelers under 350cc → big relief for mass buyers.
• 40% GST for premium motorcycles above 350cc → treated as luxury/sin goods.
• 5% GST for EVs unchanged → green mobility remains incentivized.

The result? Savings for almost everyone, except premium motorcyclists, especially those eyeing 650cc+ bikes.

Cars That Became Cheaper (Top Models)

The GST cut has made India’s most popular cars 8–9% cheaper, with savings up to ₹1.55 lakh.

• Maruti Suzuki Dzire (Compact Sedan) – ₹76,000–1.12 lakh cheaper
• Hyundai Creta (Mid-size SUV) – ₹90,000–1.70 lakh cheaper
• Maruti Suzuki Ertiga (MPV) – ₹98,000–1.45 lakh cheaper
• Maruti Alto K10 (Hatchback) – ₹55,000–72,000 cheaper
• Hyundai i20 (Premium Hatchback) – ₹78,000–1.24 lakh cheaper
• Tata Nexon (Compact SUV) – ₹1.10–1.55 lakh cheaper
• Mahindra XUV300 (SUV) – ₹90,000–1.30 lakh cheaper
• Tata Punch (Micro SUV) – ₹65,000–85,000 cheaper
• Honda Amaze (Compact Sedan) – ₹70,000–1.05 lakh cheaper
• Kia Sonet (Compact SUV) – ₹85,000–1.25 lakh cheaper
• Tata Safari (SUV) – Up to ₹1.45 lakh cheaper
• Tata Harrier (SUV) – Up to ₹1.40 lakh cheaper
• Tata Altroz (Hatchback) – Up to ₹1.10 lakh cheaper

For the first time in years, small cars are affordable again, with Maruti predicting a 10% surge in small car sales during the festive season.

Bikes & Scooters That Became Cheaper

Nearly 98% of two-wheelers sold in India are under 350cc, which means this GST cut directly helps the backbone of Indian commuters.

• Hero Splendor Plus – ₹8,676–9,700 cheaper
• Honda Activa 125 – ₹8,805–10,469 cheaper
• Honda Shine 125 – ₹9,355–9,837 cheaper
• Bajaj Pulsar 150 – Around ₹10,000 cheaper
• TVS Apache RTR 160 – Around ₹11,000 cheaper
• Suzuki Access 125 – Around ₹9,500 cheaper
• Yamaha FZ-S V3 – Around ₹12,000 cheaper
• Royal Enfield Hunter 350 – ₹16,000–18,000 cheaper
• Royal Enfield Classic 350 – ₹18,000–21,000 cheaper
• Royal Enfield Bullet 350 (new gen) – Around ₹19,000 cheaper

This is direct relief for students, commuters, and rural buyers, ensuring daily mobility becomes easier on the pocket.

The Premium Bike Sore Point

Not everyone is celebrating. Premium motorcyclists, especially enthusiasts of 650cc+ machines, are facing the heaviest GST blow:

• Bikes above 350cc now attract 40% GST (up from 31%).
• Popular mid-segment bikes like the RE Himalayan 450, KTM 390, Triumph 400s, and Aprilia RS 457 see price hikes of ₹17,000–25,000.
• The Royal Enfield 650 Twins (Interceptor, Continental GT, Super Meteor) get even more expensive, with ₹25,000–35,000 hikes.

Clearly, the government wants to position large motorcycles as luxury goods, a move that hurts only a niche enthusiast segment but we still feel that they could have kept it above 650cc capacity.

EVs Stay Untouched

Electric vehicles retain the 5% GST rate, signaling the government’s continued support for green mobility. Popular models like the Tata Nexon EV, Tiago EV, MG ZS EV, and Hyundai Kona Electric remain unchanged in price.

The Bigger Picture

• Old System: Flat 28% GST + cess → unfair burden on small cars & commuter bikes.
• New System: Tiered GST → 18% for mass buyers, 40% for luxury bikes, 5% for EVs.
• Impact:
• Cars are 8.5–9% cheaper.
• Bikes & scooters under 350cc see ₹8,000–21,000 savings.
• Premium motorcycles 650cc+ face hikes, but affect only a small slice of buyers.

Key Takeaway

The GST automotive reform of September 2025 is a pro-people bill. For most Indian families, commuters, and young riders, it’s a long-awaited relief — just in time for Navratri and Diwali car-buying season.

Yes, premium bikers take a hit, but the larger story is positive: mobility for the masses just got more affordable again.