GST 2.0 and Its Impact on Used Bike Prices in India

India’s used bike market has always been a buzz of activity. This sector will soon undergo a massive transformation with the introduction of GST 2.0 that will take place starting September 22, 2025. New tax rates introduced by GST 2.0 will impact not only the new bikes but also the whole ecosystem of used bikes. Let’s understand how GST on used motorcycles is going to impact the industry!

Understanding GST on Used Bikes

The Goods and Services Tax (GST) was initially implemented in 2017 to establish a unified tax for the entire nation. There were previously numerous taxes per state. GST 2.0 has gone a step further to simplify it further by targeting two-wheelers in terms of engine capacity.

• Bikes less than 350 cc will have 18% GST as compared to 28%.
• Bikes with more than 350 cc are taxed 40%, compared to 31%.
• Two-wheelers that use electricity remain at 5% GST.

In India, nearly 98 percent of bikes sold are less than 350 cc, and thus, this reduction in taxes comes as a relief to the majority of buyers and sellers.

GST & The Used Motorcycle Market: What’s Changing?

Most used bikes have seen a price drop. With GST on bikes up to 350 cc cut from 28% to 18%, popular models in the used market are now more affordable. Here’s how the change affects key segments:

For example, popular models like the Honda Activa and Royal Enfield Classic 350 will see used and new prices drop by up to 18,000 to 22,000 rupees. 

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Premium Segments Will Become More Expensive

For bigger bikes over 350 cc—like the Royal Enfield 650s or high-performance KTMs—the GST on used bikes has jumped to 40%, making them more expensive. As a result, buyers are likely to turn to the used market, where these models remain more accessible.

Advantages to Buyers: More Bikes, Better Prices

Reduced GST will imply that there is an increase in the population of people who can afford new bikes. As a result, their old bikes are likely to enter the used market, especially on platforms like OLX, giving consumers a wider range of options to choose from. 

The current GST rate on used bikes in the city and rural customers are the beneficiaries, particularly when it comes to the 100cc–125cc bike range. These bikes become more accessible to a larger population, supporting everyday commutes and family needs.

Trends and Individual Patterns in the Market

According to industry analysts, the market for used bikes in India increases by up to 17 percent annually with the exchange of millions of bikes. GST 2.0 offers new growth, particularly of 100cc to 350cc bikes, and might make new records in sales, especially in the festive season.

According to industry analysts, India’s used bike market experiences substantial growth annually. GST 2.0 is set to fuel it further—particularly in the 100 cc–350 cc segment—and could drive record sales, especially during the festive season.

Formalization of the market will also increase, as the GST-compliant transactions assume the status of the order on credible platforms. It enhances trust and introduces safety to high-value transactions.

OLX and the Used Bike Community

OLX is India’s leading online marketplace for used bikes in India, so it is a major participant in this transition. With GST 2.0: 

• More sellers can list their bikes, giving buyers increased options.
• OLX’s tools allow sellers to easily update listings and price their bikes competitively in line with the new tax structure.
• For premium bikes, which are projected to slow in sales, OLX provides access to affordable used options, reflecting the reduced GST on used models.

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Effects on Dealers, Rentals, and Finance

Reduced prices on sub-350 cc bikes are likely to drive more buyers to used bike dealers. Additionally, owners of rental and fleet bikes can save on the cost of adding new entry-level bikes to their fleets.

The loan agencies and finance companies are likely to offer new deals when the size of the loan reduces to affordable bikes or increases to premium ones. Reduction in the GST on secondhand bikes would reduce EMIs among ordinary citizens. 

Note: It is worth noting that GST 2.0 only affects the taxation of the sale of new bikes; used bikes are not directly affected by the tax change, since they were already taxed when the vehicle was initially sold.

Final Thoughts

GST 2.0 is a win-win for both buyers and sellers of used bikes (under 350 cc). It makes bikes less expensive and dealers and buyers more assured. As the number of bikes in the market increases at affordable rates, online platforms such as OLX are the one-stop shop to purchase and sell used bikes in India—with safe, transparent, and quick deals. 

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