TVS Motor Company on Tuesday joined other two-wheeler companies, including Hero MotoCorp, in seeking reduction of the goods and services tax rate on two-wheelers, pointing out that the mass commuting segment should not be treated on the lines of luxury goods.
TVS Motor Company on Tuesday joined other two-wheeler companies, including Hero MotoCorp, in seeking reduction of the goods and services tax (GST) rate on two-wheelers, pointing out that the mass commuting segment should not be treated on the lines of luxury goods. Raising concerns over the high GST rate, Venu Srinivasan, chairman, TVS Motor, said: “Rising urbanisation, increasing purchasing power and the enhanced need for connectivity particularly in the mid-sized and smaller cities across India have fuelled the two-wheeler revolution for personal mobility.”
“Given the importance of the two-wheeler segment as an item for mass mobility, the GST rates for two-wheelers undoubtedly needs to be reconsidered. It certainly cannot be benchmarked against the prevalent GST rates for luxury goods at 28%, especially given the current state of inconsistencies with the integrated multi-modal public transport systems across India,” Srinivasan added.
He also pointed out, with the new safety norms and BS VI integration also around the corner, two-wheeler prices will increase further. “It has become even more imperative to relook the GST rates for two-wheelers to ensure social inclusion that is sustainable in the longer run,” he said in a release here.
According to Federation of Automobile Dealers Associations (FADA), for the nine months to December 2018, the two-wheeler industry saw registrations grow only 5% to 110,71,352 units compared with 105,37,542 units in the same nine-month period of the previous fiscal.
A few days ago, Pawan Munjal, the CMD of India’s largest two-wheeler maker Hero MotoCorp, called for a rate cut at the ensuing GST Council meeting. The two-wheeler industry should be brought under the 18% rate slab instead of 28% now, it was said. Munjal had also said it was imperative for the government to bring the tax rate down to around 18%, as it would help millions of two-wheeler customers as well the entire value chain of this industry.
Bajaj Auto MD Rajiv Bajaj is said to have also supported the demand for the cut in GST rate on two-wheelers, saying that such a step would help mitigate increase in costs that would come with the implementation of new safety and emission norms.