GST on riding helmets hurting road safety in India, here’s why

While GST has been effective in bringing down prices of cars, especially in the luxury segment, there are products that have been negatively impacted. We take a look at how safety is being compromised due to high GST rate on helmets.

By: | Published: August 24, 2017 10:17 AM

While a lot is being spoken in the media and by OEMs on how additional cess on SUVs and premium cars would result in declining sales little is said on how two-wheeler riding helmets have been placed under 18% GST slab and is a completely ridiculous move by the GST Council. In the pre-GST era helmets had excise duty of about 12.5% and different value added tax (VAT) across various states but then many states like Tamil Nadu, Punjab, Goa and UT like Pondicherry had exempted VAT on helmets that allowed the helmets to be at least 10% cheaper than what it is now post GST. Allowing helmets to be exempted from GST might be the ideal thing to promote the use of helmets in order to promote road safety; however, that is too ambitious to wish for. Realistically, placing helmets under the lowest tax structure of 5% would not only please the helmet manufacturers and sellers across India but would also make the helmet more affordable making riding and Indian roads a safe place. Current 18% GST on helmets compromises on safety of two-wheeler riders and is also accelerating sales of non-ISI certified substandard helmets in India.

As the two-wheeler industry looks at double digit growth in the Indian market, Ministry of road transport and GST Council together should come up with a solution to promote the use of helmets for both the rider and pillion rider. Starting with reducing taxes on helmets and then running campaigns specially in tier-2 and tier-3 cities which have seen a major increase of two-wheeler riders.

ISI Helmets manufacturers association (ISIHMA) the body of organized helmet manufacturers had already said that placing helmets at zero GST rate will push sales of good quality helmets, "Helmets must not be treated like other commodities. The purpose they serve is far greater and must not come under any GST policy," ISIHMA President Rajeev Kapur said in a statement.

After having spoken to a few helmet dealers in cities like Chennai, Bangalore, Jaipur and Kolkata it feels like the sales of helmets have slowed down post-GST. We just hope the GST council reviews its decision soon and make riding safe and fun again by reducing GST on helmets.

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