GST Rates and HSN Code 8711 for Motorcycles

India’s Goods and Services Tax (GST) has impacted multiple industries, including the two wheeler industry. The two wheeler industry has benefited from the introduction of GST, which has merged multiple indirect taxes into one tax, leading to a more straightforward 8711 HSN Code GST rate of motorcycles, scooters and motorised two wheelers. For compliance and pricing, it is necessary for the manufacturer, dealer, or consumer to know GST rates applicable on motorcycles and the respective HSN codes.

Understanding 8711 HSN Code GST Rate

Motor cycles, mopeds and other two wheeled vehicles including cycles having an additional motor with or without side cars are classified under HSN Code 8711. This classification encompasses a variety of two wheeled motor vehicles such as light weight easily controllable low capacity mopeds to more powerful high performance motorcycles. The different sub-classifications under this code are determined mainly by the engine size and the type of device used for propulsion. According to the rules set by GST, different rates of GST are applicable depending on whether the vehicle is driven with an internal combustion engine (petrol or diesel) or an electric motor.

You Can Also Read: GST on Used Cars

GST on Motorcycles and Two-Wheeled Vehicles

Motorcycles and other two-wheeled vehicles attract a GST of 28%. But for upper-end motorcycles with engines larger than 500 cc, additional cess is applicable. The tax structure for two wheelers is divided depending on displacement. For ordinary use motorcycles, 28 percent GST is imposed for commuting. For mid-range motorcycles capable of 251 cc up to 500 cc, no additional cess is charged so the GST is also 28 percent. But for high range motorcycles over 500cc, 3 percent additional cess is imposed, total tax being 31 percent.

In India, electric two wheeled vehicles such as electric motorcycles and scooters receive a preferential statutory rate over conventional fuel powered two wheelers. Under HSN code 871160, the GST rate on electric two-wheelers is just 5%, which is lower compared to the higher taxation on petrol or diesel motorcycles and scooters. This reduction in tax is to foster the growth of electric vehicles and lessen the reliance on fossil fuels.

GST on Scooters and E-Scooters

Scooters have the same HSN Code as 8711 motorcycles and have similar taxation methods. Standard gasoline scooters incur a 28% GST while electric scooters pay just 5%. This policy shows the government’s move towards encouraging electric mobility. Such taxation by the government creates a significant price difference between conventional scooters and electric alternatives, enabling greater consumers to switch to electric scooters.

GST on Bike HSN Code: Purchases and Tax Structure

When buying a two wheeler or a bike in India, the buyer ought to understand the tax structure. A two wheeler HSN Code has additional costs that comprise the base cost, insurance, GST, and road tax. For most motorcycles, GST is set at 28%, which is very high and contributes to the high cost of the motorcycle. Further, all states impose road tax which also differs from one state to another. Since GST is a broad-based consumption tax that is uniformly applied in all regions in the country, there are no differences in the final pricing except those caused by state taxes and the dealer mark-up.

Importing motorcycles to resale can be a very good business. In this case, it is important to look into the aspects such as Input Tax Credit (ITC) which comes into play when dealing with motorcycles. One thing worth stating is that ITC usually does not apply to motor vehicles used for self transportation, but this does not apply to businesses where purchasing motorcycles for resale and offering passenger transportation or training services is the focus. In this case, the business can effectively claim ITC on the GST that was paid during the purchase.

Two Wheeler GST Tax Rate List

The following chart shows the applicable rates of tax on different categories of two-wheelers.

HSN Code	Two-Wheeler Category	GST Rate	Additional Cess	Total Tax Rate
871110	Motorcycles up to 50 cc	28%	0%	28%
871120	Motorcycles between 51 cc and 250 cc	28%	0%	28%
871130	Motorcycles between 251 cc and 500 cc	28%	0%	28%
871140	Motorcycles between 501 cc and 800 cc	28%	3%	31%
871150	Motorcycles above 800 cc	28%	3%	31%
871160	Electric Motorcycles and Scooters	5%	0%	5%

You Can Also Read: Understanding GST on Second-Hand Cars in India: What Buyers and Sellers Need to Know

The Impact of GST on Two Wheeler in India

With the introduction of the GST regime, it comes with benefits and drawbacks when viewed from the policy framework as well as the business viewpoint of the two-wheeler industry. In the previous tax arrangement, manufacturers used to have a plethora of tax restrictions, some of which were unique to individual states across the nation. There was pricing opacity and a significant lack of scrutiny across borders in India. But there also existed some positives to this. Now, the effective tax regime like the imposition of a high GST of nearly twenty-eight percent for normal motorcycles has altered the consumer price they will have to pay. This kind of tax policy has severely undermined the entry level segment provided that low cost options are a requirement for the target market.

On the other hand, the very low five percent GST on electric two-wheelers is taking consumers to a facilitated and subsidised mode of transportation; Hence, migration to more environmentally friendly alternatives is more than welcomed. In the face of soaring fuel costs combined with overarching concern for the environment, electric two-wheelers are creeping as the answer for a lot of residents in the cities. As time changes so do the manufacturers and they too are starting to focus on expanding their electric vehicle portfolio, which goes hand in hand with the government goals and market needs.

Future Outlook

The demand in the automotive sector may encourage the government to adjust GST rates regarding standard two wheelers. According to the experts, there is a case for reduction of GST in respect of two wheelers HSN code, particularly for motorcycles with engine capacity of less than 150 cc as they account for a large number of sales in India. Such reduced taxation will allow more middle class Indians to buy these motorcycles, which will boost sales and ultimately improve the growth of the economy.

On the other hand, since there is stronger market penetration of electric vehicles, there can be increased tax incentives or reduced tax on electric scooters and motorcycles to facilitate the growth of sustainable modes of transportation. The effects of GST on the two-wheeler market in the long run will depend on the policies that are balancing revenue collection, cost to the consumer and the preservation of the environment.

Conclusion

In the two wheeler space, it is important for businesses and consumers to be cognizant of the HSN code 8711 and the corresponding GST rates. Presently, the GST framework has high tax rates of 28% on motorcycles and scooters while the electronic two wheelers such as e-bikes are taxed at 5%, which encourages economic move towards sustainable lifestyle. Policy regulatory moves, going forward, will affect the GST on motorcycles along with the expectations from the industry and consumers. As the two-wheeler industry continues to grow, staying informed about taxation policies and regulatory updates will be essential for manufacturers, dealers, and buyers alike.

FAQs

1. What is the applicable GST rate for motorcycles under the 8711 HSN code?

Motorcycles classified under HSN code 8711 are levied with 28% GST, alongside an extra 3% cess on motorcycle engines exceeding 500 cc.

2. What is the HSN code for motorcycles under GST?

Motorcycles, as well as mopeds and scooters, have the HSN Code of 8711 assigned to them. There are various subclasses for it based on the category of the motorcycle and its engine size.

3. What is the HSN code for two-wheeled scooters and motorbikes?

Scooters and motorbikes are all covered under HSN code 8711. However, variations also exist with respect to engine capacity and whether the two-wheeler is electric or fuel-driven.

4. What is the scooty GST Rate HSN code?

The HSN Code for petrol or diesel scooties is subject to 28% GST, in contrast to electric scooters which incur only 5% GST.

5. What is the HSN code of electric scooters, while what is the corresponding GST rate?

Electric scooter HSN code 871160 are categorized under that code for which the GST rate is 5%. The purpose of this is to boost public transport convenience in an eco-friendly manner.

6. Do motorcycles in India incur GST? If yes, how much is it?

GST is 28% for regular motorcycles and inclusive of additional cess for motorcycles that exceed 500 cc. 5% GST is applicable for electric motorcycles.

7. What is the motorcycle GST rate for different types of engines?

Motorcycles that do not exceed 500 cc have 28% GST while for those that surpass 500 cc, the taxation increases to 31%, which includes an additional 3% cess.

8. What is the mechanism of calculating GST on purchase of a bike HSN Code 8711?

The benchmark for calculating the GST on bike purchase begins from the ex-showroom price: conventional motorcycles attract 28% GST, while electric motorcycles incur 5% GST.

9. How do you explain GST in relation to two wheelers in India?

Regular two-wheelers attract a standard GST of 28% India. But to promote environmentally friendly mobility, electric two wheeler GST has been fixed at 5%.

10. How can I get the list of two wheeler GST tax rate?

The GST tax rate list of two wheelers can be obtained from relevant GST law publications and other internet such as the government websites, tax consultation pages, or HSN code lists.