[TusharK]

A delegation of the Federation of Automobile Dealers Associations (FADA) recently met the Minister of Road Transport & Highways Nitin Gadkari, seeking a reduction of GST on entry-level 2-wheelers.



FADA has requested the government to reduce the GST on entry-level 2-wheelers in the 100-125cc segment from 28% to 18%.

According to Manish Raj Singhania, President, FADA, a reduction in GST would alleviate the burden on potential buyers, especially in rural India and prove as a catalyst for the resurgence of the segment, which has seen a 20% decline since pre-Covid times.

Singhania stated that 2-wheelers account for over 75% of the volume, with the entry-level category making up 70% of it.

Source: ET Auto

Link to Team-BHP News

[Iconoclast]

There's no justifiable reason for taxing 2-wheelers less than 150cc at 28% GST. These are neither sin goods nor luxury; the 2 reasons for bucketing goods under the highest GST slab. Roughly half of India's 310 mn. households have a 2-wheeler and a vast majority of these would be in possession of a commuter motorcycle/ scooter.

Data shows that these folks are delaying the replacement of their two-wheelers due to a massive increase in the price of entry-level commuters in the last 3-4 years due to n number of reasons; from Demonetization/GST implementation and its impact on the unorganized sector, forced upgrades to comply with regulations, commodity inflation, the impact of Covid lockdowns on incomes and livelihoods at the lower end of the society, etc. and the current average age of two-wheelers is at a record high.

Besides, considering that the price elasticity of demand is very high at these price points; an increase in demand due to a reduction in GST rate may actually lead to an increase in overall GST collections. Someone at FADA/ SIAM must run these simulations and present them to the Finance Ministry, MORTH, and the GST Council if they haven't done that already.

[antz.bin]

They probably won't do it. If they do, 125cc scooters will again gain a price advantage as compared to Electrics which are still reeling from the shock of the FAME 2 fiasco. In fact, the first thought that came to my own mind was that I will go for a TVS Ntorq as soon as this happens.

Most sub 125cc 2-wheelers are runabout vehicles and don't really need 100s of km of range that comes with them, especially the geared vehicles. If someone is using a 2 wheeler of this segment for >100 km a day on a daily basis, he/she will be better off with an EV on fuel costs alone.

Govt have to carefully manage GST collections vs spending on crude oil vs green credentials and climate change. They are already working on metro rail to reduce the dependence on 2-wheelers in cities all over the country. With better electricity availability, village folks can start opting for EVs (that have just 5% GST).

[Nithesh_M]

If the Government can start taxing packaged essential food items with gst like they did recently, then they sure as heck won't be reducing gst on 2 wheelers which according to the Babus (who themselves keep roaming in Custom made jets, spending lakhs of crores for new government buildings, owning bulletproof Land Rovers and fleet of Fortuners) is a luxury item in India.

[Turbohead]

Very unlikely. How else can they tax a group of people who don't pay income tax?

With better roads and highways, in the past 6-7 years we've been noticing two wheelers traveling between towns for work. These are regular 100cc bikes and they maintain a rather steady peace. These are people who are trying to make their ends meet and not driving for pleasure. Absolutely agree with the earlier posts that this class of vehicles are rather a necessity than luxury.

Hope sense prevails. They're going too far with the taxation. Can't imagine the stress the lower class will be going through - high inflation with minor to no rise in wages.