Auto dealers urge government to reduce GST on entry-level bikes to 18%

Reiterating its demand, automobile dealers on Thursday urged the government to reduce GST rates on entry-level two-wheelers to 18 per cent, saying the segment has not recovered from the impact of Covid-19 pandemic.

“Although the two-wheelers segment experienced year-on-year (YoY) growth, we are still 20 per cent behind the pre-Covid levels. Two -wheeler industry is an important part of the mobility ecosystem, and hence we urge the government to reduce the GST rate from 28 per cent to 18 per cent for entry-level two-wheelers in the 100-125 cc range. This change isn’t just a policy adjustment, it’s a catalyst for socio-economic progress,” Manish Raj Singhania, President, Federation of Automobile Dealers Associations (FADA), said.

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Speaking at the fifth Auto Retail Conclave here, Singhania said in the ongoing fiscal year, so far, while the retail sales of total vehicles have grown by around seven per cent, the entry-level two-wheeler segment is yet to witness robust growth.

“In the last fiscal year, we witnessed a resurgence, achieving a record-breaking 21 per cent growth rate with 22.1 million vehicles leaving our showrooms. Two-wheelers surged 19 per cent, three-wheelers by a staggering 84 per cent, passenger vehicles by 23 per cent, and commercial vehicles by an incredible 33 per cent. Despite this remarkable progress, the two-wheeler segment remains 20 per cent below pre-Covid levels. In the last five months, auto sales have grown by seven per cent,” Singhania said .

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According to the latest data shared by FADA, in the April to August period this fiscal, two-wheeler sales were at 65,15,914 units as against 62,35,642 units in the same period of the previous year, a growth of 4.49 per cent. Total vehicle sales across categories during the period stood at 91,97,045 units, a growth of 6.75 per cent y-o-y compared to 86,15,337 units in the corresponding period last fiscal.

Singhania urged the Presidents of SIAM and ACMA to present a unified front for a joint meeting involving SIAM, ACMA, and FADA to discuss issues that require collective attention.

“The time has arrived for all of us to adopt a more collaborative approach to innovate and accelerate toward a more resilient future,” he added.