Royal Enfield Chief Calls for Uniform 18% GST on All Two-Wheelers

Eicher Motors Executive Chairman and Royal Enfield’s bossman Siddhartha Lal has appealed to the government to adopt a uniform goods and services tax rate for all two-wheelers ahead of the upcoming GST Council meeting.

In an Instagram post, Lal argued that a common GST rate of 18% would enable India to maintain its edge in the global two-wheeler market. The GST Council will consider proposals for restructuring tax slabs during its meeting on September 3-4.

Lal warned that differential taxation could severely impact the industry's ability to compete internationally. "Success abroad requires a wide and competitive product range. A punitive GST on above 350cc would relegate us to smaller capacity two-wheelers, and undermine Indian brands' ability to build strong dealer networks and brand equity worldwide," said the chief of Eicher Motors, which manufactures Royal Enfield motorcycles.

GST Restructuring Proposals

The Group of Ministers has proposed reducing the current tax structure to only two slabs of 5% and 18%, which would eliminate the existing 12% and 28% slabs. However, reports suggest an additional 40% slab could be introduced for select luxury goods, potentially including two-wheelers with engines above 350 cc.

If such a proposal is accepted, it could significantly increase the on-road prices of Royal Enfield motorcycles, which primarily feature engines above 350cc displacement. And Royal Enfield’s portfolio of bikes starts from 350 cc onwards, and tops out at 650 cc, with ongoing development for a bigger 750 cc parallel-twin mill as well.  

Lal expressed concern about the potential impact on the domestic market and investment climate. "A differential rate would dramatically shrink the domestic above 350cc segment, and choke the investment needed for India to compete globally," he stated in his social media post.

The GST Council's decision during the September meeting will determine whether the current tax structure remains or undergoes the proposed simplification, with significant implications for the premium two-wheeler segment in India.