Leading two-wheeler manufacturers across the country, including Hero MotoCorp, have been lobbying for a GST rate cut on motorcycles and scooters in India for a while now. Those who don’t know, the government currently classifies two-wheelers as luxury goods, which means they are subjected to a GST rate of 28 per cent. Hero and other two-wheeler manufacturers have long argued that bikes and scooters are not luxury goods and are actually basic means of mobility. At the Hero Maestro Edge 125 and Hero Pleasure Plus launch yesterday, Sanjay Bhan, Head of Sales and Marketing, Hero MotoCorp told us that the company hasn’t given up on the cause and continues to campaign for a reduction in the GST rates. Bhan noted that two-wheeler prices have already increased owing to the addition of combined braking system (CBS) and anti-lock brakes (ABS) being made mandatory from 1 April, 2019. And they will go further up when BS VI comes into effect from 1 April, 2020.
He said a GST rate cut is crucial to ensure that motorcycle and scooter’s prices in India remain viable for the masses. Pawan Munjal, Chairman, Managing Director, and CEO, Hero MotoCorp, had spoken about the need to reduce the GST rate for two-wheelers to 18 per cent earlier this year. He had said the reduced tax rates will help both two-wheeler buyers as well as the value chain that relies on the two-wheeler industry. BS-VI emission norms will necessitate the use of fuel-injection on all two-wheelers in the country, which is expected to further increase prices of motorcycles and scooters. And considering the cost-sensitive nature of commuter segments, a price hike of even ₹5,000 will make this quite challenging for buyers and manufacturers alike.