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TVS urges rethink on Two-wheeler GST rates, says new norms will hit pricing

Chairman Venu Srinivasan says two-wheeler have revolutionised personal mobility, should not suffer luxury tax rate of 28%

T E Narasimhan  |  Chennai 


TVS Motor Company Chairman Venu Srinivasan has said that the Goods and Services Tax (GST) rates for two-wheelers should be reconsidered, especially at a time when the new safety norms and fuel norms are expected to increase the prices of such vehicles.

Rising urbanisation, increasing purchasing power and the enhanced need for connectivity particularly in 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 such vehicles undoubtedly needs to be reconsidered. It certainly cannot be benchmarked against the prevalent GST rates for luxury goods at 28 per cent, given the current state of inconsistencies with the integrated multi-modal public transport systems across India," he said.

More so, with new safety norms and BSVI integration also around the corner, both of which will increase two wheeler prices. It has become even more imperative to relook at the GST rates for two wheelers to ensure social inclusion that is sustainable in the longer run, he added.

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His comment comes a few days after Pawan Munjal, chairman and managing director of Hero MotoCorp, had sought an urgent cut in the GST on two-wheelers from 28 per cent to 18 per cent, as these vehicles provide basic mobility to the masses.

“Given that two-wheelers provide basic mobility to the masses, there is an urgent need to reduce the GST rate on them from the 28 per cent bracket of ‘luxury goods’ to that of 18 per cent for mass-usage items,” Munjal had commented in a statement last week.

However, Rajiv Bajaj, managing director and CEO of Bajaj Auto has said that the industry should not expect anything from the government and should focus on products.

First Published: Tue, January 08 2019. 17:15 IST