GST Impact: Royal Enfield Bikes To Cost Less

Royal Enfield motorcycles will cost less once a flat Goods and Service Tax (GST) will come into place from 1 July 2017. Taxes of many motorcycles, including Royal Enfield 350 cc motorcycles, are expected to reduce in most states, when GST is implemented. Under GST, most two-wheelers will attract a tax rate of 28 per cent, which is lower than the current total tax incidence of around 30 per cent. This includes Royal Enfield's bestselling models like the Classic 350, which will cost slightly less.

"The slab for reduction is expected to be between Rs. 1,600-2,300 on-road Chennai. The reduced slab will vary from state to state," a Royal Enfield spokesperson has said. Royal Enfield dealers CarandBike reached out to are still not clear what the exact amount of discounts will be, but maintain that the reduced rates will only come into effect once GST kicks in from 1 July 2017. One Royal Enfield dealer in Delhi said that Royal Enfield 350 bikes will cost as much as Rs. 3,000 less after 1 July 2017.

(The Royal Enfield Himalayan will cost more after GST kicks in on 1 July 2017)

Motorcycles over 350 cc will, however, attract an additional cess of 3 per cent, and Royal Enfield's 350 cc motorcycles, with actual capacity of 346 cc, just about makes it under the limit to pass on the benefit to customers. But other Royal Enfield bikes, like the Himalayan, Bullet 500, Classic 500, Thunderbird 500 and the Continental GT are expected to cost more once GST kicks in. Dealers aren't sure how much more expensive these bikes will be, but the additional cess will have some impact on on-road prices for sure.

Most customers however, prefer the 350 cc models. In fact, the Royal Enfield Classic 350 made up over 68 per cent of Royal Enfield's total sales in FY2017. In all, 4,16, 693 Classic 350 bikes were sold between April 2016 and March 2017.

So, if you're in the market for a Royal Enfield 350 bike, it will be better to wait till 1 July 2017 to get some benefit. But for those seeking the Royal Enfield Himalayan or any of the 500 cc models, now would be a good time to check availability and make the purchase.