FADA urges GST Council to reduce GST Rates on Two Wheelers

The Federation of Automobile Dealers Associations (FADA) has made an important submission to the GST Council, requesting that the GST rate for two-wheelers be reduced from 28% to 18%.

This opportune intervention aims to make two-wheelers more accessible and inexpensive, boosting demand and reinvigorating a sector that has seen considerable sales declines in recent years.

Manish Raj Singhania, President of FADA, emphasises the precarious position of the two-wheeler business, which is experiencing unprecedented problems such as growing prices, severe emission standards, and the Post-Covid-19 consequences. He emphasises that now is the time for the GST Council to cut the GST rate on two-wheelers, making them more affordable to the general public. This decrease would offer a much-needed boost to the industry, creating jobs and promoting India’s overall economic growth.

The Finance Minister, the head of the GST Council, all GST Council members, the Ministry of Heavy Industries, and the Ministry of Road Transport & Highways have all received FADA’s persuasive appeal. The widespread distribution of this image emphasises the importance and urgency of the topic at hand.

Prices of two-wheelers have risen dramatically in recent years, putting customers throughout India out of reach. Rising raw material costs, tighter pollution standards, and greater taxes have all contributed to the price increase.

Popular models such as the Honda Activa, Bajaj Pulsar, Hero Splendour, and TVS Jupiter, for example, have had significant price increases, resulting in a drop in sales. FADA emphasises the importance of involvement and lowering the GST rate in order to restore the industry’s development trajectory.

Historically, two-wheelers made for a sizable share of automotive sales in India. However, as prices continue to rise, their contribution has decreased from 78% in 2016 to 72% in FY23. FADA thinks that lowering the GST rate will help to solve major industry issues such as rural suffering, the transition to BS-6 emission standards, and the significant increase in two-wheeler pricing. This action will improve the industry’s competitiveness, sales, and revenue.

Lowering the GST rate on two-wheelers will assist the sector while also having a favourable environmental impact. Two-wheelers are more fuel-efficient and generate less emissions than larger means of transportation such as vehicles. This reduction will contribute to a cleaner environment by encouraging the usage of two-wheelers.

FADA expressed hope that the GST Council and the relevant ministries will seriously examine their petition and take the required actions to cut the GST rate on two-wheelers.

This action will help not just the industry, but also the general public, the environment, and the Indian economy as a whole. The representation of FADA is a crucial step towards revitalising the two-wheeler sector and stimulating economic growth in the country.