**Eicher Motors Calls for Uniform GST Rate for All Motorcycles**
Eicher Motors, the parent company of Royal Enfield, has made a strong appeal to the Indian government for a uniform Goods and Services Tax (GST) rate for all motorcycles, including those with higher capacities. This request was shared via a LinkedIn post on August 30, 2025. Recent media reports suggest that the proposed GST revisions could lower the tax on smaller capacity bikes to 18%, while imposing a higher rate on larger models.
Currently, the GST framework in India applies a 28% tax on automobiles, supplemented by a compensation cess that varies from 1% to 22%, depending on the vehicle type. Siddhartha Lal, Chairman of Eicher Motors, emphasized the dominance of Indian two-wheeler brands in the small-capacity motorcycle market globally and noted the industry’s transition into the mid-capacity segment.
In his post, Lal expressed an urgent plea to policymakers regarding the recent GST announcements. He believes that reducing the GST for motorcycles under 350cc would enhance accessibility, but increasing taxes on higher-capacity bikes could undermine India’s competitive advantage in the global market. “To maintain this momentum, a uniform GST of 18% across all two-wheelers is essential. Lowering GST for 350cc bikes could harm a segment crucial to India’s global standing,” he stated.
Lal warned that a differential GST rate could stifle growth in the over 350cc category, limiting the necessary investments for India to remain competitive internationally. He pointed out that raising GST on these motorcycles would yield minimal revenue while constricting the segment. For many Indian riders, these motorcycles are not luxury items; they serve as efficient and affordable alternatives to cars, contributing to reduced fuel consumption and maintenance costs, which in turn helps lower India’s fuel imports.
Currently, only about 1% of the Indian population owns motorcycles exceeding 350cc. Lal highlighted that India outperforms countries like China, Japan, Europe, and the United States in the two-wheeler market. Transitioning to a uniform GST regime could further solidify India’s leadership in this sector.
India’s GST system currently operates on a four-tier structure, with rates of 5%, 12%, 18%, and 28%.
**FAQ**
**Q: Why is Eicher Motors advocating for a uniform GST rate for motorcycles?**
A: Eicher Motors believes that a uniform GST rate of 18% for all motorcycles would enhance accessibility, support investment in the higher-capacity segment, and maintain India’s competitive edge in the global market.
