Two-wheeler taxation changes: Royal Enfield advocates for standard 18% rate across all motorcycles - "India currently leads in this area..."
In a recent LinkedIn post, Siddhartha Lal, Chairman of Eicher Motors, the parent company of Royal Enfield, has appealed to the Indian government to reconsider the recent GST announcement and implement a uniform GST rate of 18% across all two-wheelers.
Lal emphasised the importance of this move in sustaining India's global edge in the motorcycle market. He highlighted the dominance of Indian two-wheeler brands in the small-capacity motorcycle segment globally and the potential reinforcement of this leadership if India moves to a uniform GST regime.
Currently, GST rates for automobiles in India range from 5% to 28%, with additional compensation cess charges ranging from 1% to 22%. The revised GST structure is likely to bring down the tax imposed on smaller capacity bikes to 18%. However, higher capacity bikes are expected to attract a higher GST rate.
Lal pointed out that only around 1% of people in India own motorcycles above the 350 cc segment. He expressed concern that increasing GST rates for higher capacity bikes could harm India's edge in the global market, as it could shrink the over 350cc category, potentially choking the investment needed for India to compete in the global market.
Lal did not provide any new information about the government's response to his appeal or the recent GST announcement. He also did not discuss the impact of a uniform GST rate on the prices of Royal Enfield motorcycles in his LinkedIn post.
Recently, the prices of Royal Enfield Bullet 350 have been increased, with the new range costing between ₹1.75 to ₹2.18 lakh. For Indian riders, motorcycles above 350cc are not luxury goods; they are efficient, affordable alternatives to cars, offering lower fuel use and maintenance, as well as benefits that help reduce India's fuel imports, said Lal.
The Indian government has considered implementing a uniform GST rate for motorcycle manufacturers to streamline taxation, but no decisive change has been finalized yet. Lal did not mention any specific changes to the GST structure for smaller capacity bikes in his LinkedIn post.
Eicher Motors has urged the government to consider a uniform GST rate for motorcycles to maintain India's global edge in the motorcycle market and to ensure the continued growth and competitiveness of the Indian two-wheeler industry.
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