Two-Wheelers Get Cheaper Unless You Ride a Beast over 350cc
Key Points
GST cut reduces rates on two-wheelers and small PVs from 28% to 18%, boosting affordability.
CRISIL predicts 5-6% growth in two-wheeler sales and 2–3% in passenger vehicles this fiscal.
Consumers may save up to ₹60,000 on small cars and ₹7,000 on two-wheelers.
Bhubaneswar, Sep 8: India’s automobile industry is set to receive a major boost this fiscal year, thanks to the GST Council’s recent decision to rationalize tax rates.
According to a report by CRISIL Ratings, two-wheeler sales are projected to grow by 5-6%, while passenger vehicles (PVs) may see a more modest rise of 2-3%.
The revised GST structure, effective September 22, slashes rates on two-wheelers up to 350cc and small PVs from 28% to 18% — a move expected to increase demand by 200 basis points for two-wheelers and 100 basis points for PVs.
This comes at a crucial time, aligning with the Navratri and festive season, when consumer sentiment typically surges.
📱 Get Argus News App
✨
Anuj Sethi, Senior Director at CRISIL Ratings, noted that the GST cut could reduce vehicle prices by 5-10%, translating to savings of ₹3,000-₹7,000 on two-wheelers and ₹30,000-₹60,000 on small cars. Combined with new model launches and softer interest rates, the industry is poised for a strong second half.
Mid and larger PVs will also benefit from a 3-7% tax reduction, while tractors will see rates drop to 5% and 18% from the previous 12% and 28%. However, motorcycles exceeding 350cc will face a steep 40% special rate, making them more expensive.
With affordability improving and festive cheer in the air, India’s auto sector may be gearing up for a much-needed revival.
Written by: Saijyoti Banita Priyadarshini