Hero MotoCorp wants Center to rethink GST tax structure for two-wheelers in India. Pawan Munjal, chairman of India’s largest two-wheeler maker, is seeking to reduce GST rates on bicycles and scooters in the country’s internal combustion engine and electric two-wheeler segments. He urged the Center to reduce the GST rate from 28% to 18%. His comments come as India’s two-wheeler industry has struggled with sales in the past few years. Hero MotoCorp hopes the center will support the segment by reducing the tax burden for buyers.
Addressing Finance Minister Nirmala Sitharaman’s 2023 Budget on Wednesday, Pawan Munjal said two-wheelers cannot be placed in the same class as luxury or sinful goods. “There is a clear rationale for reducing the GST rate from 28% to 18% for the two-wheeler category, which has been adversely affected over the past few years. This category is a mode of mass mobility and should not be subject to clubs as well as GST flats. luxury and sin goods categories,” he said. “Besides, now that GST collection is active, I urge the GST Council to deal with this issue as this segment is a revenue multiplier and its growth will boost the economy,” Munjal added.
While praising some of the other proposals in Budget 2023, the two-wheeler maker said the decision to lower the tax rate is expected to provide buyers with more disposable income. This could ultimately help boost the growth of the automotive industry and help the two-wheeler segment benefit in the process.
Finance Minister Nirmala Sitharaman has brushed aside calls to reduce GST rates on vehicles while proposing several measures for the auto industry, especially electric vehicle makers. The auto industry has long demanded revised rates, which remain similar for mass-market and niche models sold in the country. Earlier, the Federation of Automobile Dealers Associations (FADA) had asked the government to reduce the GST rate on two-wheelers by 18% to stimulate demand in the segment.
First published date: Feb 3, 2023 at 14:15 PM CST