The Government of India’s Finance Ministry is evaluating a proposal that will slash taxes levied on two-wheelers, in order to fuel demand.

  • Current GST rate is 28 percent

  • Industry expects GST to come down to 18 percent

  • Rate cuts expected to help boost demand

Addressing the virtual Confederation of Indian Industries (CII) forum, Finance Minister, Nirmala Sitharaman said that it is a “good suggestion to cut GST on two-wheelers as this category is neither a luxury nor a sin good and hence merits a rate revision”. She adds that this suggestion will be taken up with the GST council.

While a decision has yet to be taken, a rate revision will certainly work as a shot in the arm for the industry, which has been struggling to deal with a slump in demand. This has been mainly due to an increase in prices by 15-18 percent due to factors like the IRDA’s…

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