350cc Bike: The Indian government has announced a major plan to simplify GST. Now there will be only two slabs, 5% and 18%. This change will also affect two-wheelers. Bikes under 350cc will attract only 5% GST. But motorcycles above 350cc will fall under the 18% tax slab. Bajaj Auto MD Rajiv Bajaj has raised questions about this difference, saying the move is not fair for bigger bikes.

Rajiv Bajaj’s Concerns

Rajiv Bajaj recently shared his views in a CNBC interview clip posted on Instagram. He pointed out that the government is reducing GST on large bikes from 28% to 18%. While this is a welcome step, he argued that 18% is still too high. According to him, this rate is 50% higher than the average global rate of 12%.

Why All Bikes Should Have the Same Rate

During the discussion, Bajaj highlighted that 97 to 98 percent of two-wheelers sold in India are below 350cc. That means the higher tax slab impacts only a small segment. He questioned why the government did not keep things simple by applying the same rate to all motorcycles. He stressed that drawing a line between bikes based on engine size creates unnecessary complications.

Impact on Manufacturers

Bajaj explained that different tax rates force manufacturers to rethink their product strategies. Companies may focus on producing more models under 350cc to take advantage of the lower slab. This leads to an imbalance in the market. In his words, this kind of policy indirectly pushes makers to adjust their portfolio, rather than offering consumers natural choices.

Effect on Buyers and Market

Rajiv Bajaj also linked the issue with consumer behavior. By encouraging smaller bikes with lower tax, buyers may avoid higher-capacity motorcycles. He warned that this is not healthy for long-term industry growth. Bigger bikes not only bring variety but also contribute to the economy. He even mentioned China, where policies helped the market grow stronger.

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