Two-Wheeler GST Rate To Be Revised, Likely To Be Taxed At 18 Percent

Honda CD 110 Dream — Two-wheelers currently come under the sin goods category

Two-wheeler GST rate is set to be revised soon to a lower tax bracket from the top 28 percent slab, which would result in a reduction in retail price of two-wheelers by a respectable amount.

Finance Minister Nirmala Sitharaman, on 25th August, stated that two-wheelers are neither a luxury (item) nor sin goods and so merit a GST rate revision.

Sitharaman also stated that two-wheeler GST rate revision proposal would be taken up by the GST Council when such a proposal was put forward at an industry interaction she took part in.

If implemented, the tax reduction would not just help the two-wheeler industry get back on its feet, but also run at full speed.

Bajaj Auto’s Managing Director Rajiv Bajaj has stated that reducing the tax bracket from 28 percent to 18 percent would reduce the retail prices of such vehicles by Rs. 8000-10,000/-.

He also stated that it would be great for the industry, adding that the government needs to give incentives for consumers at such testing times.

And provide an incentive it should, as millions of Indians rely on two-wheelers for their daily commute, with many even banking on them to run their business. Such a move would only help the masses.

Hero MotoCorp had last year urged the government to reduce the tax on two-wheelers to 18 percent, starting with bikes up to 150cc.

At present, two-wheeler GST rate is on par with items termed as sin goods, namely tobacco, cigars, racing cars, yachts, pistols, rowing boats, among others.