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…