HMSI Director Requests For Lower GST On Scooters And Motorcycles

Honda Motorcycle And Scooter India Limited’s Director of Sales and Marketing, Yogesh Mathur has requested the Government of India to consider lowering GST (Gross Service Tax) levied on two-wheelers. The senior official has cited that scooters and motorcycles are a necessity in the country and not luxury. 

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Currently, scooters and motorcycles with or below 350 cc engines attract 28 per cent GST. While those with bigger displacement motors further attract a cess of 3 per cent, bringing the total tax levied on them to 31 per cent. Due to this high taxation, in the last fiscal year motorcycle sales were not on par with scooter sales. As a result of which the rural market registered soft demand. While other factors also played spoilsport, like the unpredictable monsoon season, elections, etc. Affordability became a major concern, and the higher asking price, which was primarily pushed by high taxation, is further pushing away future customers. 

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Interestingly, Yogesh Mathur also pointed out how last-mile-connectivity in the country is just not on par with India’s growing population. So with this situation in the purview, he argued that a two-wheeler becomes more of a necessity in the personal mobility space. The demand to lower GST on two-wheelers has been going on for long with some manufacturers even suggesting bringing it down to 18 per cent for vehicles under 125 cc capacity, which form the bulk of the market.

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Coupled with upcoming emission norms, that will kick into effect from April 1 onwards, prices of all two-wheelers will further increase. We have already got a taste of that with Honda launching its bikes and scooters at a premium due to the updates it had to make to the engine to comply with latest OBD-2B emission norms.