In September 2025, India introduced a revised Goods & Services Tax (GST) policy for two‑wheelers. The new slab structure draws a clear line at 350 cc: bikes up to that displacement enjoy tax relief, while larger machines face higher taxation. Royal Enfield, which has a strong lineup on both sides of the 350 cc boundary, is particularly affected. Here’s what’s changed, how it impacts RE bikes, and what prospective buyers should know.
Key Changes in GST Policy
- Bikes with engine displacement up to 350 cc: GST reduced from 28% to 18%.
- Bikes above 350 cc: GST rate increased to 40%, up from the earlier ~31% (28% + 3% compensation cess).
- These changes take effect from 22 September 2025.
Royal Enfield: Models Under & Over 350cc
Royal Enfield has several models that fall just under the threshold (350 cc) and several above. The GST reform thus has a mixed impact on its range.
Bikes ≤ 350 cc (benefiting from the tax cut)
These include:
- Hunter 350 (349 cc)
- Classic 350
- Meteor 350
- Bullet 350
- Goan Classic 350
What the benefit looks like:
- Royal Enfield has announced price reductions of up to ₹20,000‑₹22,000 on its 350cc models, depending on variant.
For example:
- Classic 350 could see ~₹20,000 off.
- Hunter 350, Bullet 350, Meteor 350 similarly will get reductions in the ₹15,000–₹22,000 range depending on variant.
Bikes > 350 cc (seeing price increases)
Models above the 350 cc mark include:
- Himalayan 450
- Guerrilla 450
- Scram 440
- Entire 650 cc range (Interceptor 650, Continental GT 650, Super Meteor, Shotgun, etc.)
These will now attract 40% GST, making them significantly more expensive.
Estimated price increases vary by model, but many are expected to go up by ₹20,000‑₹35,000 (or more) depending on the variant and base price.
What This Means for Buyers & Royal Enfield Strategy
- For first‑time or budget/mid‑range buyers eyeing Royal Enfield’s 350cc bikes, this is good news. Bikes like Classic 350, Hunter 350, Bullet 350 etc. become noticeably cheaper in ex‑showroom terms. This could broaden the appeal.
- For buyers of larger displacement Royal Enfield bikes (450 cc, 650 cc), the higher GST will raise the cost substantially. Buyers may look at waiting for deals, earlier deliveries, or absorbing some cost via promotions.
- Royal Enfield has publicly asked for a uniform GST rate across all two‑wheelers (i.e. 18%) arguing that the differentiated slab could hurt its premium/aspirational models.
Sample Price Changes for Royal Enfield
Here are some sample ex‑showroom price changes (approximate) based on published data. These are useful to understand the range of impact. Note: actual prices will vary depending on variant, state taxes, colours, etc.
| Model | Displacement | Old ₹ (ex‑showroom) | New ₹ (after GST change) | Approx Change |
|---|---|---|---|---|
| Classic 350 | 349 cc | ~ ₹1,93,000 | ~ ₹1,73,000 | ~ ↓ ₹20,000 (The Economic Times) |
| Hunter 350 | 349 cc | ~ ₹1,49,900 | ~ ₹1,34,900 | ~ ↓ ₹15,000 (The Economic Times) |
| Meteor 350 | 349 cc | ~ ₹2,05,000+ | ~ ₹1,85,000‑1,90,000 | ~ ↓ ₹15,000‑₹20,000 (The Economic Times) |
| Himalayan 450 | 452 cc | ~ ₹2,85,000 | ~ ₹3,10,000+ | ~ ↑ ₹25,000‑₹30,000 (www.ndtv.com) |
| Interceptor 650 | 648 cc | ~ ₹3,09,000 | ~ ₹3,37,000+ | ~ ↑ ₹25,000‑₹30,000 (The Economic Times) |
Broader Implications
- The differential GST slab is designed to push accessibility in the under‑350cc segment, making iconic bikes more affordable to a larger demographic.
- Meanwhile, the increased tax on over‑350 cc bikes may reduce demand somewhat in the premium segment, or at least slow its rate of growth. This could affect sales volumes, brand positioning, and even how manufacturers plan future models.
- Royal Enfield’s plea for uniform taxation shows that the industry anticipates challenges: higher costs for premium models, potential drop in sales, or shifts in buyer preference.
Conclusion
The GST reform effective from 22 September 2025 draws a sharp line at 350 cc, with meaningful benefits for motorcycles at or below that limit, including many of Royal Enfield’s most popular models. For buyers of those bikes, this is a favorable moment. However, for those considering larger displacement bikes, one must factor in the higher tax burden.