- SIAM proposes cutting down the base GST rate to 18 per cent
- Requests further lowering tax on flex-fuel and electric two-wheelers
- Indians pay much higher taxes than most other developing countries
The Society of Indian Automobile Manufacturers (SIAM) has requested the heavy industries ministry to reduce the goods and services tax (GST) on two-wheelers, as per an online report. The automobile industry proposed to have different tax slabs for two-wheelers running on different fuel types.
SIAM has requested the ministry to bring down the base GST rate to 18 per cent from the current rate of 28 per cent. The industry also proposed further reducing the tax on CNG and flex-fuel two-wheelers to 12 per cent. Furthermore, SIAM urged the ministry to remove the 3 per cent cess imposed on all two-wheelers above 350cc.
The main objective of the move is to make all types of two-wheelers more accessible to potential buyers. The prices of bikes and scooters are already at an all-time high, courtesy of the introduction of new safety and emission regulations over the last year few years. At present, Indian customers have to bear the brunt of 28 per cent GST, road tax, insurance premium and, for those who buy two-wheelers above 350cc, a 3 per cent cess. Other developing countries like Indonesia and Thailand pay much lower taxes of around 7-11 per cent. Also, the steep prices of green vehicles due to high taxes will pose a hindrance to the adoption of EVs.
