SEPTEMBER 2025

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GST: A Vexatious Issue

The government has decided to lower the Goods and Services Tax (GST) rate for motorcycles. Come 22 September 2025, there will be two rates: while motorcycles with a capacity of up to 350 cc will attract the lower rate of 18 per cent. Those above 350 cc will entail 40 per cent GST, as per the official notification from the GST Council as of now.

The idea of two slabs is not good for the two-wheeler industry. It will not encourage manufacturers to develop large-capacity motorcycles with a view to competing on the international level. As of today, only two Indian manufacturers make motorcycles with a capacity of over 400 cc: Classic Legends and Royal Enfield. Ideally, the GST for all motorcycles should be 10 per cent.

Furthermore, the cost of sub-125-cc bikes will not come down significantly on account of the imminent rule that will make the anti-lock braking system (ABS) mandatory for such motorcycles. Once the rule comes into force, it will increase the price of small bikes. In India, we have plenty of motorcycle-related norms compared to some of the other countries in the world. Instead of making things mandatory for bikes, the government would do well to concentrate on better roads and infrastructure for the people who pay one of the highest road taxes in the world.

The use of E20 fuel is going to wreak havoc, especially on old bikes that have carburettors. The corrosive nature of the alcohol-based fuel will disintegrate the rubber parts, such as rubber intake manifolds and float valves, and cause damage to the piston cylinder liner and the combustion chamber when the bike is not in regular use.

On another note, there should be a concise syllabus for schoolchildren, teaching them the dos and don’ts of traffic and instilling basic civic sense related to how to behave on a public road and obey the basic traffic rules.

Aspi Bhathena

Editor