In a strategic move underscored by an urgent online report, the Society of Indian Automobile Manufacturers (SIAM) has formally appealed to the Ministry of Heavy Industries for a reduction in the Goods and Services Tax (GST) on two-wheelers. This industry body has advocated for a more nuanced tax structure, differentiated by the fuel types powering these vehicles.
SIAM’s proposal calls for a substantial decrease in the base GST rate from the prevailing 28 percent to a more reasonable 18 percent. Moreover, the association has put forward a recommendation to further alleviate the tax burden on CNG and flex-fuel two-wheelers, suggesting a reduction to 12 percent. In an additional plea, SIAM has urged the ministry to abolish the 3 percent cess currently levied on all two-wheelers exceeding 350cc.
The overarching goal of this initiative is to enhance the affordability of two-wheelers for the Indian populace. The current market scenario, burdened by soaring prices due to stringent new safety and emission regulations, sees consumers grappling with an exorbitant 28 percent GST, along with road tax, insurance premiums, and a 3 percent cess on higher capacity bikes. This financial strain is particularly stark when compared to other developing nations like Indonesia and Thailand, where taxes hover around a mere 7-11 percent. Additionally, the high taxation on eco-friendly vehicles threatens to stymie the growth and adoption of electric vehicles (EVs), a critical component of sustainable transportation.