Bajaj Auto CEO Pushes for GST Cut On Bikes

Rajiv Bajaj, CEO of Bajaj Auto called on the government to reduce the Goods and Services Tax (GST) on motorcycles, particularly commuter bikes.

He cited how several ASEAN countries have significantly lower GST on similar vehicles, ranging between 8% and 14%. In comparison, India has a GST rate of 28% which makes motorcycles unnecessarily expensive in India.

"Why do we have to pay a GST of 28% on commuter vehicles in India? This is much higher compared to other countries," Bajaj said. He put forth that a reduction in GST to 18% or even 12% would make motorcycles more affordable and boost demand, which has remained sluggish since the COVID-19 pandemic.

Bajaj acknowledged the positive impact of stricter regulations like BS-VI emission norms but mentioned that the high GST rate negates some of the benefits. He also criticised the mandatory implementation of the Anti-Lock Braking System (ABS) as "regulatory overkill" that adds to the overall cost.

Bajaj's request echoes a long-standing demand from the two-wheeler industry. Last year, the Federation of Automobile Dealers Associations (FADA) urged the government to reduce the GST on two-wheelers to 18%, citing the need to revive demand in the wake of a sales slump.

The government, however, has not shown any inclination towards lowering the GST on two-wheelers, likely due to concerns about the potential impact on its overall GST collection. Also, Bajaj is developing a CNG motorcycle lineup and there are also more Z models expected to see in the Bajaj lineup.