Hero MotoCorp, Bajaj Auto, and select manufacturers are absorbing the recent GST hike on motorcycles above 350cc to sustain demand during the festive season. The government raised GST on these bikes from 31% to 40% on September 22, while lowering the rate for sub-350cc motorcycles from 28% to 18%, making smaller bikes more affordable.
Premium models like Harley-Davidson X440, KTM 390 Duke, and Triumph series remain priced at pre-GST levels, protecting buyers from increased costs. In contrast, Royal Enfield, a market leader in the mid-size segment, has passed on the tax hike to customers.
Sales in the 350cc–500cc segment dropped 6% in the first half of the fiscal year to 51,412 units, according to the Society of Indian Automobile Manufacturers. Industry insiders noted that passing the GST hike could further weaken demand, especially during the critical festive season.
By absorbing the tax increase, manufacturers aim to maintain showroom traffic and capitalize on seasonal sales, while models under 350cc see boosted affordability, encouraging higher volumes. Bajaj emphasized that absorbing the hike ensures riders can continue enjoying popular bikes like the 390 Duke and 390 Adventure without additional costs.
This strategy reflects the competitive market for premium motorcycles in India, balancing consumer affordability with brand loyalty amid tax changes.