Siddhartha Lal, Managing Director of Royal Enfield, has called for a consistent 18% Goods and Services Tax (GST) rate to be applied to all two-wheelers. According to Lal, this is a critical factor for sustaining the current growth trajectory of the industry. Reports suggest that the government is considering a revised GST structure that would see smaller motorcycles taxed at 18%, while higher-capacity models might remain subject to higher taxation.
Presently, automobiles are categorized under the highest GST slab of 28%, with an extra compensation cess ranging from 1% to 22% depending on the vehicle’s classification.
Lal noted the significant success of Indian brands in the small-capacity motorcycle market globally and their strategic expansion into the mid-capacity motorcycle segment. He stated that Indian manufacturers are offering exceptional value, attracting riders globally to switch from larger, higher-displacement motorcycles to Indian-made, mid-size models. To sustain this positive trend, a uniform 18% GST rate for all two-wheelers is essential.
Royal Enfield, part of Eicher Motors Ltd, is a leading force in the mid-sized motorcycle market.
Lal further stated that while a reduction in GST for bikes below 350cc would enhance accessibility, increasing the GST for motorcycles above 350cc would be detrimental to a segment crucial for India’s global market competitiveness.