Kinetic India seeks uniform GST rate for two-wheelers

Two-wheeler maker Kinetic India has urged for a uniform tax rate on motorcycles at the two-day GST Council meeting beginning Wednesday, while also seeking the continuation of the lower 5% GST on electric vehicles.

The Centre has proposed to rationalise the Goods and Services Tax structure by retaining the 5% and 18% slabs, introducing a concessional rate below 1%, and a “sin rate” of 40%. The move is expected to benefit the auto sector as the current standard GST of 28% on all vehicles could be reduced to 18%. However, concerns remain over reports that vehicles with higher engine capacity may attract a higher rate.

“Since the majority of the market, over two crore per annum, is already in the lower category, there is no need to create this divide and a mid-ground but common tax should be implemented,” Ajinkya Firodia, Vice-Chairman of Kinetic India, said in a press statement.

Earlier, Royal Enfield Executive Chairman Siddhartha Lal had voiced similar concerns, warning that an increase in GST for motorcycles above 350cc would adversely affect that segment.

The auto industry has also sought clarity on the continuation of incentives for electric vehicles. “Penetration is still in single digits at 9%. Hence, we should consider subsidy continuation and enhancement for five years clearly, till there is a 40-50% shift to the same,” Mr. Firodia added.