Auto stocks in demand; jump up to 8.5% on GST rate cut hope

By: |
August 26, 2020 7:52 PM

Two-wheelers are neither a luxury nor sin goods and so merit a GST rate revision, Finance Minister Nirmala Sitharaman said at an industry interaction on Tuesday.

Auto stocksTwo-wheelers currently attract 28 per cent GST.

Auto stocks were in demand on Wednesday, rising up to 8.5 per cent, after sitharaman hinted at a GST rate revision for two-wheelers.

Among two-wheelers, shares of Hero MotoCorp jumped 6.43 per cent, TVS Motor Company gained 4.88 per cent and Bajaj Auto 2.42 per cent on the BSE.

Other auto stocks were also in demand, with Tata Motors rising 8.50 per cent, Ashok Leyland 1.50 per cent, Eicher Motors 1.47 per cent and Mahindra and Mahindra 0.62 per cent. The BSE Auto index closed 1.50 per cent higher at 18,278.57.

Two-wheelers are neither a luxury nor sin goods and so merit a goods and services tax (GST) rate revision, Finance Minister Nirmala Sitharaman said at an industry interaction on Tuesday.

According to a statement issued by CII, which was also issued by the finance ministry’s spokesperson, Sitharaman said a rate revision proposal would be taken up by the GST Council.

Two-wheelers currently attract 28 per cent GST.

“Responding to a question about the need for lowering GST rates on two-wheelers, she assured that this was indeed a good suggestion as this category is neither a luxury nor a sin good and hence merits a rate revision,” the statements said.

This “will be taken up with the GST Council”, the statements quoted Sitharaman as saying.

Last year, the country’s largest two-wheeler maker Hero MotoCorp had urged the government to consider a phase-wise reduction in GST on the segment, starting with bringing bikes up to 150cc into the 18 per cent slab.

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