Siddhartha Lal, Managing Director of Royal Enfield, is advocating for a uniform 18% GST rate on all two-wheelers, considering it vital for maintaining market momentum. The proposed GST adjustment could potentially lead to an 18% tax rate for smaller motorcycles, whereas larger-capacity motorcycles may continue to face higher taxation.
Current tax regulations place automobiles within the highest GST bracket of 28%, along with an extra compensation cess ranging from 1% to 22% based on the specific vehicle.
Lal highlighted that Indian brands hold a significant position in the small-capacity motorcycle market globally and are now expanding into the mid-capacity segment. He stated that the industry is drawing riders from larger motorcycles towards Indian-made, mid-size motorcycles. He emphasized the need for a consistent 18% GST rate for all two-wheelers to sustain this growth.
Royal Enfield, a subsidiary of Eicher Motors Ltd, is a major player in the mid-sized motorcycle sector. Lal emphasized that reducing GST for bikes under 350cc would improve market accessibility, but increasing it for motorcycles above 350cc could negatively affect a crucial segment for India’s worldwide market presence.