Key highlights
- GST 2.0 likely to be introduced by Diwali this year
- It will reduce the GST on the two-wheeler to 18%
- Buying new motorcycles and scooters will become more affordable
The Indian government is believed to be working on a new GST slab for the two-wheelers. This new structure is likely to be introduced before the Diwali season to boost the sales of the two-wheeler industry. Read the complete details below.
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GST 2.0 to make the two-wheelers more affordable, how?
As per the latest online reports, the Indian government is readying a new two-stage GST slab for the two-wheelers. The current slabs, which include 5%, 18%, 28%, and 31% tiers, are radically opposed by the mass segment two-wheeler manufacturers and economists.
The online reports hint at the new GST 2.0 rollout, which is likely to be introduced before the upcoming festive season to boost the two-wheeler sales. As per the rumours, the new structure will replace the old tax slab tiers with two slabs – 5% GST on the essential goods and 18% GST on the standard goods.
If so, this will drastically bring down the cost of the two-wheelers in India, especially the motorcycles/scooters belonging to the 350cc slab. The current tax regime imposes 31% GST on the two-wheelers above 350cc capacity. As per the two-wheeler manufacturers, this is too high for a price-sensitive market like India.
Moreover, the essential and affordable two-wheeler segments like 100cc and 125cc are also subject to 18% GST. This leads to fewer sales as many potential buyers tend to change their decision by a price difference of a few thousand rupees. The new tax slabs are expected to change the market and offer more affordability.
Additionally, the government is also expected to include the bi-fuel or flex-fuel vehicles like CNG and more, with an exciting GST rate, thus further boosting the confidence of manufacturers to invest and produce less polluting vehicles.
Our say
While the new GST structure for the two-wheelers sounds good, it is yet to be determined whether the new tax rates will be introduced without any conditions or not. As of now, the two-wheeler market is preparing for the upcoming festive season sales with new offers.
