FADA Calls for Lower GST on Entry-Level Two-Wheelers to 18%

A Plea for Relief: Lowering GST Rates for Two-Wheelers

The Federation of Automobile Dealers Associations (FADA) is asking for a reduction in the Goods and Services Tax (GST) rates for basic two-wheelers to 18 per cent. They believe this move is essential because the entry-level two-wheeler market is still struggling to bounce back from the impact of the COVID-19 pandemic.

Steady Growth, But Room for Improvement

While overall vehicle sales have seen an increase of about 7 per cent in this fiscal year, the entry-level two-wheeler category hasn't seen the robust growth it needs. Even though there has been year-on-year growth in this segment, it's still 20 per cent behind the levels before COVID-19 hit.

A Request for Relief from FADA

During the Auto Retail Conclave, FADA President Manish Raj Singhania made a direct plea to Union Road Transport and Highways Minister Nitin Gadkari. He urged the minister to consider reducing the GST rate from the current 28 per cent to 18 per cent for entry-level two-wheelers, specifically those in the 100cc and 125cc categories.

Boosting the Economy and Social Welfare

Singhania emphasized that this adjustment wouldn't just be a policy change. It would act as a significant boost for the economy, especially since this segment accounts for 75 per cent of total auto sales volume. It's not just about the industry; it's about the well-being of many individuals and families.

Positive Growth Trends

Looking at the numbers, in the April to August period of this fiscal year, two-wheeler sales reached 65,15,914 units, a growth of 4.49 per cent compared to the same period last year. Across all vehicle categories, total sales during this period were 91,97,045 units, showing a growth of 6.75 per cent.

FADA's request for a lower GST on entry-level two-wheelers aims to give a much-needed boost to this segment and ultimately, contribute to the overall recovery of the automotive industry.

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