FADA Seeks GST Cuts for Entry Level Two Wheelers by 1000 bps

The Federation of Automobile Dealers Associations requested on Thursday a drop in the GST rate for entry-level two-wheelers to 18%, claiming that the market has yet to fully recover from the COVID-19 pandemic’s effects.

Manish Raj Singhania, president of the Federation of Automobile Dealers Associations (FADA), said in a speech at the Auto Retail Conclave that while the retail sales of all vehicles have increased by about 7% so far this fiscal year, the entry-level two-wheeler segment has not yet experienced the same robust growth.

“Although the two-wheelers segment experienced year-on-year growth, we are still 20% behind the pre-COVID levels,” Singhania said.

Turning to Union Road Transport and Highways Minister Nitin Gadkari, who was the chief guest at the function, he said, “That’s why FADA strongly urges honourable minister to help us get a reduction in GST rate from 28% to 18% for entry-level two-wheelers that is the 100cc and 125cc segment.” He further said,

“This would not be merely a policy adjustment, it would act as a social economic catalyst, especially considering this segment constitutes 75% of our total auto sales volume.” According to FADA data, in the April to August period this fiscal, two-wheeler sales were at 65,15,914 units as against 62,35,642 units, a growth of 4.49%.

Total vehicle sales across categories in the April-August period of the ongoing fiscal stood at 91,97,045 units, as compared to 86,15,337 units in the corresponding period last fiscal, a growth of 6.75%, as per FADA.