The Society of Indian Automobile Manufacturers (SIAM) has requested the Ministry of Heavy Industries to reduce GST on two-wheelers from the current 28 per cent to 18 per cent. The association has also urged to remove the 3 per cent cess (additional tax) on premium bikes above 350cc displacement.
Once the current base rate is reduced to 18 per cent, SIAM proposes that the tax for CNG and flex-fuel-powered two-wheelers should be further reduced to 12 per cent. SIAM states that reducing these taxes would be the most direct and effective method for achieving the desired outcome towards carbon neutrality.
In its letter, the apex national body representing all major vehicle and engine manufacturers in India highlights the comparatively high GST rate for two-wheelers in India, which is 28 per cent, versus much lower rates in other developing nations, such as 9.25 per cent in Brazil, 10 per cent in Vietnam, 7 per cent in Thailand, and 11 per cent in Indonesia, among others.
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Customers in India bear a hefty financial burden when purchasing two-wheelers, paying 28 per cent GST, road tax, and insurance premiums, in addition to a 3 per cent cess for motorcycles with engine capacities above 350cc. These costs are calculated over and above the ex-showroom price, significantly increasing the overall expense of owning a two-wheeler. This makes the total cost of acquisition considerably higher compared to global standards, impacting affordability and accessibility for potential buyers in the country.
If the government accepts this demand, this will highly benefit Baja Auto, which is all set to introduce its first CNG-powered motorcycle very soon.
