TVS 23 aug launch

After a weak season, manufacturers are calling for a GST rate cut on two-wheelers. Currently two-wheelers are kept in the highest slab…

Pawan Munjal, head of Hero MotoCorp went vocal recently demanding a GST slash on two-wheelers. Rajiv Bajaj also joined him but he added a little twist to the tale. And in a latest, TVS has shot in their demand for a rate cut as well.

In a press note received moments back, Mr Venu Srinivasan, Chairman of TVS Motor Company has asked for a slash in GST rates on two-wheelers. Like others, he also questions the government’s decision of levying the highest 28 percent GST on two-wheelers.

This slab is primarily meant for luxury goods which are not a necessity for the majority of Indians. However, two-wheelers, specially in a country like ours, are the primary mode of transport specially for the lower and middle class section of the society and hence an equivalent tax slab doesn’t make a lot of logic.

GST Rate Cut on Two-Wheelers

GST Rate Cut on two-wheelers, Mr Srinivasan’s Wordings,

Rising urbanisation, increasing purchasing power and the enhanced need for connectivity particularly in the mid-sized and smaller cities across India, has fuelled the two wheeler revolution for personal mobility. Given the importance of the two – wheeler segment as an item for mass mobility, the GST rates for two-wheelers undoubtedly needs to be reconsidered. It certainly cannot be benchmarked against the prevalent GST rates for luxury goods at 28%, especially given the current state of inconsistencies with the integrated multi-modal public transport systems across India. More so with new safety norms and BSVI integration also around the corner, both of which will increase two wheeler prices. It has become even more imperative to relook at the GST rates for two wheelers to ensure social inclusion that is sustainable in the longer run.

Very recently, the two-wheeler industry suffered because of a major price increment which was a resultant of the mandatory 5 year insurance which was levied on all the 2-wheeled vehicles. The generic demand is to keep two-wheelers in lower GST slabs like 18 percent or even 12 percent to make the prices affordable and to offset the recent hike due to insurance.