Reduce Taxes On Two-Wheelers: SIAM Requests The Indian Government

  • Jun 13, 2024
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With Indian customers paying almost 4 times the taxes imposed by other countries on two-wheelers, prices of even entry-level commuter bikes are at an all-time high

Hero Splendor Plus Riding Front Profile

Other News Highlights:

- SIAM has requested the Indian government to reduce GST rate for 2 wheelers to 18%

- Reduce tax on CNG and flex-fuel bikes to 12 percent

- Remove Cess tax on premium bikes above 350cc

The current GST (Goods and Services Tax) rate for petrol-powered bikes and scooters in India is 28 percent. And now, SIAM (Society of Indian Automobile Manufacturers) has requested the Government of India to reduce it to 18 percent. 

In the same letter sent to the Ministry of Heavy Industries, the automotive body has also requested to reduce tax on CNG and flex-fuel two-wheelers to 12 percent. This will help make them more accessible to potential customers. Also, this request comes ahead of Bajaj Auto gearing up to launch India’s first CNG bike on July 17. An additional request on top of these is to remove the Cess tax (additional tax) on premium bikes above 350cc.

The reasoning behind this request is that unlike other developing countries like Indonesia and Thailand, where the tax rate is 7-11 percent, Indian customers have to pay 28 percent GST along with road tax and insurance premium for their vehicles. And if you are a premium bike owner, an additional Cess tax is also imposed on top of that. All these taxes push the ownership cost of a petrol-powered two-wheeler beyond the realm of affordability for a lot of buyers. For example, the Hero Splendor Plus costs Rs 75,441 (ex-showroom) and by adding in all the taxes and insurance charges, the total cost comes to about Rs 1 lakh. 

Hero Splendor Plus Cornering

Also, during the launch of the Bajaj Pulsar NS400Z, Rajiv Bajaj, CEO of Bajaj Auto, expressed similar views on the two-wheeler taxation structure in India. He said that the 28 percent GST imposed on two-wheelers is too much compared to other countries. This new development regarding SIAM’s request might be one of the reasons why the Bajaj CNG bike’s launch was postponed from June 18 to July 17, 2024.

Source

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