In the current Indian scenario, two-wheelers are essential rather than a luxury, and taxes on these vehicles should be lowered, as the industry faces a single-digit growth next fiscal year with affordability becoming a concern, stated a senior executive from Honda Motorcycle and Scooter India. Honda Motorcycle and Scooter India (HMSI) Director of Sales and Marketing Yogesh Mathur informed PTI in an interview that there is a need for income tax rationalization to help middle-income individuals resume spending.
Rationalisation in GST will benefit the two-wheeler sector, which is encountering demand challenges due to reduced spending by potential buyers and rising vehicle costs from new regulatory compliance, he stated.
"From the perspective of GST rationalisation, we have been urging the government to genuinely address this matter since two-wheelers are certainly not a luxury." "Our people need to travel," Mathur stated when questioned about the industry’s calls for reduced taxes on two-wheelers.
In the current fiscal year, motorcycle sales have underperformed compared to the scooter segment because of weaker demand from the rural market, influenced by several factors such as delayed monsoons, he noted.
Currently, two-wheelers with engines up to 350cc are subject to a GST of 28 percent, whereas those exceeding 350cc incur an additional 3 percent cess, resulting in a total tax of 31 percent.
He highlighted that at present, last-mile connectivity is lacking in India, and public transport is also insufficient to accommodate the increasing population, particularly in the "urban areas that are currently congested."
Additionally, the general elections influenced rural motorcycle demand since consumers were preoccupied with the event, he mentioned.