FADA asks GST Council to cut rate on two wheelers from 28% to 18% as sales plummet

The Federation of Automobile Dealers Associations (FADA) said it has submitted a representation to the GST Council urging immediate reduction in the GST rate on two-wheelers from the current 28% to 18%.

The Federation of Automobile Dealers Associations (FADA) said it has submitted a representation to the GST Council urging immediate reduction in the GST rate on two-wheelers from the current 28% to 18%.

“This timely and decisive intervention is aimed at making two-wheelers more affordable, reviving demand and reinvigorating an industry that has seen a significant slump in sales over the past few years,” FADA said in a statement.

Manish Raj Singhania, president, FADA said, “The two-wheeler industry is at a critical juncture, grappling with unprecedented challenges such as rising inflation, stringent emission norms and post Covid-19 effects.”

“Now is the opportune moment for the GST Council to reduce the GST rate on two-wheelers, making them more accessible for the common man, thereby providing much-needed boost to the industry, generating employment opportunities and fostering India’s overall economic growth,” he said.

Over the past few years, prices of various two-wheelers have risen significantly, impacting their affordability for consumers across India, FADA said.

For instance, the price of Honda Activa has escalated from ₹52,000 in 2016 to ₹88,000 in 2023. Similarly, the price of Bajaj Pulsar has increased from ₹72,000 in 2016 to ₹1,50,000 in 2023.

Hero Splendor and TVS Jupiter have also experienced considerable price hikes over the same period, with their prices soaring from ₹46,000 to ₹74,801 and ₹49,000 to ₹88,498, respectively, FADA said.