Bigger the bike, higher the tax: Those under 350cc to benefit

NEW DELHI: Bigger bike makers, primarily Royal Enfield, were a dejected lot as benefits from GST rate cuts only helped motorcycles below the 350cc segment, with the powerful machines seeing the tax go up from 28% to 40%.While Royal Enfield will still see a big portion of its motorcycles being spared (as their volume models are just a shade smaller than 350cc), their other bigger, aspirational and high-margin models will be hit badly. These include the Guerrilla, Himalayan, Interceptor, Continental GT, and Super Meteor models, all of which have engines upwards of 350cc.Perhaps getting a sense of the govt's plans to hike GST on bigger bikes, Royal Enfield MD Siddhartha Lal had said on LinkedIn a few days ago that motorcycles above 350cc should not be penalised.

"Lowering GST for under-350cc will help broaden access, but raising GST for above-350cc would damage a segment vital to India's global edge," he said, adding, "A split tax regime would cripple investment and scale, restrict global reach, and hand an opening to foreign competitors.

"Other brands that will be impacted include Harley-Davidson, and Triumph. Harley, which makes bikes in India in partnership with Hero Moto, sells the HD440 model.

Hero also retails a twin version of the model called Mavrick440. Both will soon be priced higher.Industry analysts say there will be a "temporary blip" in demand for bigger bikes as the prices go up. "Companies will need to re-work their strategies and focus more on 350cc versions for higher volumes. They will face more competition from global brands," an analyst said.