Lower GST rates on two-wheelers proposed by SIAM

– SIAM proposes to reduce the basic GST rate to 18 percent

– Requests a further reduction in taxes on flex fuel and electric two-wheelers

– Indians pay much higher taxes than most other developing countries

The Society of Indian Automobile Manufacturers (SIAM) has requested the ministry of heavy industries to reduce the goods and services tax (GST) on two-wheelers, according to an online report. The auto industry proposed introducing different tax slabs for two-wheelers that run on different types of fuel.

SIAM has requested the ministry to reduce the basic GST rate from the current rate of 28 percent to 18 percent. The industry also proposed to further reduce the tax on CNG and flex-fuel two-wheelers to 12 percent. Moreover, SIAM urged the ministry to abolish the 3 percent discount on all two-wheelers above 350cc.

Right side view

The main aim of the move is to make all types of two-wheelers more accessible to potential buyers. Prices of bicycles and scooters are already at an all-time high, thanks to the introduction of new safety and emissions regulations in recent years. Currently, Indian customers have to bear the brunt of 28 percent VAT, road tax, insurance premium and, for those buying two-wheelers above 350 cc, a 3 percent tax. Other developing countries such as Indonesia and Thailand pay much lower taxes of around 7-11 percent. Also, the steep prices of green vehicles due to high taxes will hinder the adoption of electric vehicles.