New Delhi, Sept. 4 -- Indian bike makers such as Royal Enfield Ltd and Bajaj Auto Ltd will soon have to grapple with higher taxes on their most premium products, with the GST Council having decided to raise the tax on two-wheelers with an engine capacity above 350cc to 40%. Earlier, such two-wheelers attracted 28% GST with a 3% cess, taking the total tax to 31%.

The government simultaneously decreased the tax on two-wheelers below 350cc, which covers the entire mass-market segment, from 28% to 18% to boost demand. However, executives at premium bike makers said the decision to have two separate tax slabs for two-wheelers would end up hurting domestic companies' global ambitions.

Siddhartha Lal, chairperson of Eicher Motors, Enfield's pa...