India (Commonwealth Union) _Federation of Automobile Dealers’ Association (FADA) on Thursday sought a GST concession on bikes and scooters from 28 percent to 18 percent, asserting the segment being one of the key essentials among millions of Indians cannot be classified as sin or luxury items.
“Two-wheelers, being essential for millions, should not be categorized as sin goods or luxury items for GST taxation purposes,” FADA President Manish Raj Singhania said in a media statement.
The appeal has already been made by the Association to the chair of India’s GST Council, all GST Council members, the Ministry of heavy industries, which supervises the automobile sector, and the Ministry of road transport & highways.
The FADA further elaborated the tax concession would be timely and critical help in making two-wheelers more affordable, increasing demand and rejuvenating the industry that observed a notable collapse in sales over the past few years due to rising inflation, stricter emission norms, and the post Covid-19 effects.
This shoot-up in prices is further attributed to numerous factors, including the rising cost of raw materials and higher taxes and levies, the Federation explained.
The industry body reckons the requested move of the GST council would provide a propitious opportunity to make two-wheelers more affordable and more accessible for the common people of the Indian subcontinent.
The tax reduction will definitely help provide the much-needed boost to the shrinking industry resulting in opening up new employment opportunities and bolstering India’s overall economic growth, the statement further elaborated.
The use of two-wheelers by a large segment of the Indian community is considered to be the most affordable and trustworthy mobility providing a great solace for people in rural areas where public transportation is not rampant and sparse.
As per the FADA observation, the prices of various two-wheelers have plummeted significantly damaging, fixed reliable, and potential customer base for all kinds of two-wheelers.
Over the past few years, price comparison of bikes has indicated that the price of the popular Honda Activa and Bajaj Pulsar has been escalated from Rs 52,000 in 2016 to Rs 88,000 in 2023and from Rs 72,000 in 2016 to Rs 1.5 lakh in 2023 respectively.
Outlining the sharp decline the FADA has requested to introduce make a considerable tax concession for the industry to thrive on par with the customers’ demand.
The decline in sales of two-wheelers was mainly due to the price hike and it has been the pressing need for intervention and GST rate reduction to restore the industry’s growth trajectory, FADA stated.
Reducing the GST rate will definitely improve the quality and competitiveness of two-wheelers compared to other transportation modes, thereby increasing sales and revenue for the industry,” FADA reiterated.
