In order to make two-wheelers more accessible, Honda Motorcycle and Scooter India, the nation’s second-largest two-wheeler producer by volume, has called for a decrease in the Goods and Services Tax (GST) rate on two-wheelers.
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Currently, two-wheelers with engines up to 350cc are subject to a 28% GST rate. Models with engines larger than 350cc are subject to an extra 3% compensating cess. Leading original equipment manufacturers (OEMs), including as Hero MotoCorp and Bajaj Auto, have already lobbied the government to reduce the two-wheeler GST rate in order to increase demand for the product.
In terms of volume, India is the world’s largest two-wheeler market. The Society of Indian Automobile Manufacturers (SIAM), an industry association, reports that two-wheeler wholesale sales increased 13.3% year over year (y-o-y) from 1,58,62,771 units in FY23 to 1,79,74,365 units in FY24. According to SIAM data, the two-wheeler volume increased 11.6% year over year to 1,50,39,570 units in FY25 (April–December) from 1,34,70,842 units in the same period last year.
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As per the report of indiatoday.com, Yogesh Mathur, director of sales and marketing for Honda, stated: “A two-wheeler is more of a need than a luxury. Therefore, why should it be subject to a higher tax rate from that standpoint? The question of how to reduce GST and make two-wheelers more affordable has been raised by SIAM and by us.
We switched from BS3 and BS4 to BS6 OBD2B, and this standard is comparable to those of many developed nations. We have so already attained that level from a regulatory perspective, but the product is now significantly more expensive. There is currently a problem with public transportation. “Last-mile connectivity is still lacking.”
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To meet the more stringent BS6 OBD2B standards, Honda has updated a number of models, including the Activa, Activa 125, Dio, Livo, SP125, SP160, and Unicorn. Additionally, these models’ costs increased as a result of the addition of new features.
Honda has made great progress in the current fiscal year so far, catching up to Hero in terms of domestic two-wheeler volume, now trailing by just 1,92,582 units. The difference was significantly larger at 7,19,518 units over the same time previous year.
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