Royal Enfield has once again requested a major change from the government. The company says that the GST on bikes above 350cc in India should be reduced to 18%. This means Royal Enfield is demanding a uniform tax rate for all motorcycle categories. Currently, the GST structure in India is divided into two parts. Bikes up to 350cc are charged 18% GST, while bikes above 350cc are taxed at 40%, which proves that buying a bike with a heavy engine is very expensive for the consumer.

Royal Enfield Seeks Tax Relief

Royal Enfield is concerned that increasing the price of bikes above 350cc will shrink the market. The company argues that such a divided tax structure directly affects the mid-size motorcycle segment in India. Royal Enfield says that reducing the GST on bikes above 350cc will increase sales and provide scale. It will also reduce the price of new and popular bikes like the 450cc and 650cc models. India can become the world's mid-size motorcycle hub, but a uniform tax structure is essential for this.

Royal Enfield argues that high taxes and low sales are the reasons why bikes above 350cc fall into the premium category. The 40% GST makes these bikes excessively expensive.  This discourages customers from buying them. India is the world's largest production hub for the mid-size motorcycle (350–650cc) segment. If taxes remain high, investment will decrease, and international companies will take advantage of the opportunity.

Low demand will reduce production. This may cause companies to lag in introducing new technology, new engines, and new models. If the government reduces the GST from 40% to 18%, the price of bikes could drop by ₹20,000 to ₹60,000. Sales of bikes above 350cc could soar.

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