Automobile dealers' body FADA on Thursday sought a cut in GST on two-wheelers from 28 per cent to 18 per cent, saying the segment being essential for millions should not be categorised as luxury item.

The industry body said it has appealed to the finance minister, chair of the GST Council, all GST Council members, the ministry of heavy industries, which supervises the automobile sector, and the ministry of road transport & highways.

“The two-wheeler industry is at a critical juncture, grappling with unprecedented challenges such as rising inflation, stringent emission norms and the post Covid-19 effects. Now is the opportune moment for the GST Council to reduce the GST rate on two-wheelers, making them more accessible for the common man,” FADA President Manish Raj Singhania said in a statement.

Two-wheelers play a pivotal role in providing affordable mobility to a large segment of India's population, especially in rural areas where public transportation is sparse, the industry body stated.

“FADA strongly asserts that two-wheelers, being essential for millions, should not be categorised as sin goods or luxury items for GST taxation purposes,” it said.

FADA noted that over the past few years, the prices of various two-wheelers have risen significantly, impacting their affordability for consumers.

“The continuous rise in two-wheeler prices has consequently led to a decline in sales, emphasising the pressing need for intervention and GST rate reduction to restore the industry's growth trajectory,” FADA stated.

However, due to the continuous price increases since 2020, this contribution has fallen to 72 per cent in FY23, underlining the impact of the steep price hike, FADA said.

Source: Business Standard
https://www.business-standard.com/industry/auto/automobile-dealers-body-seeks-cut-in-gst-on-two-wheelers-from-28-to-18-123051800851_1.html