Buying Ola, Ather, Hero, Bajaj, TVS electric scooters and bikes in 2025? Know the new GST rate

GST on electric scooters and bikes: The GST Council has approved new rates for electric bikes and scooters that will come into effect on September 22, 2025. 

While the GST on two-wheelers with engine capacity above 350cc has been increased to 40%, electric two-wheelers will continue to be taxed at 5%. 

How much GST will you have to pay on electric scooters?

Here is the GST rate on electric scooters in India now: 

Notably, as many as 6,89,324 electric scooters have been sold in India just in 2025 as of September 5, according to data from Vahan Dashboard.

GST reforms

The government has eliminated the 12% and 28% slabs, bringing most items on these slabs to the 5% and 18% brackets, respectively. Further, a third slab of 40% has been introduced for luxury and sin items, including tobacco products, online gaming and gambling, etc. 

As a relief to motorcycle lovers, the GST on two-wheelers with an engine capacity below 350cc will now attract 18%, down from 28% earlier. 

As per reports, these two-wheelers under 350 cc make up nearly 98% of the Indian motorcycle market. “Over 97–98% of all two-wheelers sold in India are under 350 cc. Why not keep it simple and make 18% applicable to everything? By excluding the top 1–2% by volume, we create distortions,” a CNBC-TV18 report quoted Bajaj Auto Managing Director Rajiv Bajaj as saying.

The GST on electric vehicles remains unchanged at 5%. Industry players have said that this will aid India’s clean mobility goals. This means that Ola Electric and Ather bikes will now be cheaper and accessible to more people. 

"The next-generation GST reforms announced today mark a defining moment in India's journey towards building a simpler, fairer, and more inclusive tax system," Mahindra Group CEO & MD Anish Shah said in a statement on Wednesday. 

GST on cars

GST on Petrol, LPG and CNG cars with engines below 1,200 cc and diesel cars up to 1,500 cc, as long as they are not longer than 4,000 mm, will now be 18%, down from the earlier 28% rate. Buses and trucks, along with ambulances, will also be taxed at 18%. 

Further, electric cars will continue to be taxed at 5%. 

However, mid-sized and large cars exceeding 1,200 cc petrol or 1,500 cc diesel engines, or those longer than 4,000 mm, will now be taxed at 40%, coming under the luxury category. 

This means that while cars like WagonR, Maruti Swift and Hyundai i20 will get cheaper, other cars like Creta, Kia Seltos and Toyota Fortuner will get more expensive.