Siddhartha Lal, the Managing Director of Royal Enfield, recently urged the government to adopt a consistent 18% GST rate for all two-wheelers to sustain industry progress. Reports indicate that the revised GST structure could reduce the tax on smaller motorcycles to 18%, while higher-powered bikes may continue to be taxed at a higher rate.
Under the current system, automobiles are taxed at the highest GST rate of 28%, with an additional compensation cess ranging from 1% to 22% based on the vehicle type.
Lal noted that Indian brands have achieved global leadership in the small-capacity motorcycle segment and are now focusing on the mid-capacity category. He emphasized that these brands offer exceptional value, attracting riders from around the world to switch from larger machines to Indian-made mid-size motorcycles. He emphasized the importance of a uniform 18% GST to support this trend.
Royal Enfield, a part of Eicher Motors Ltd, is a key player in the mid-sized motorcycle market.
Lal stated that reducing the GST for bikes below 350cc would boost access, while increasing it for bikes above 350cc could negatively affect a segment critical to India’s global position.