GST rates on motorcycles in India depend on the engine capacity. Those exceeding the 350cc mark, fall under the 31 percent bracket while the sub-350cc motorcycles are subject to 28 percent tax.
At present, 28 percent GST is levied on the purchase of new entry-level motorcycles and scooters. However, if the application submitted by a delegation from FADA gets the government’s nod, the tax rates would be dropped down to 18 percent.
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As per Manish Raj Singhania, President, FADA, the sales of entry-level motorcycles, majorly comprising the 100-125cc segment, has witnessed a substantial 20 percent decline in its retails since the pre-Covid times.
As per the latest monthly data revealed by FADA, other segments such as the three-wheeler segment, witnessed a record-high retails at 94,148 units, marking the category’s recovery during the slump registered in the post-Covid levels.
However, the two-wheeler segment fell by a substantial 23 percent as against the pre-Covid retail volumes. It is interesting to note that the entry-level models, alone, account for 70 percent of the total retails in the segment.
In order to propel the segment towards the recovery trajectory, FADA has appealed to the Union Minister. If the proposed tax reductions get the centre’s approval, it is believed to enable the potential buyers, especially the ones in the rural sectors, to purchase the vehicles without any burden.
The cumulative vehicle sales in the country during August grew to 17,70,180 from the 16,09,217 units clocked in the corresponding month last year.
(With inputs from PTI.)