28 Percent GST On Two-wheelers Too Much, Says Rajiv Bajaj. Here’s Why We Agree

Bajaj recently launched the Pulsar NS400Z at a mouth-watering price, and while the launch of the biggest Pulsar bike ever was the highlight of the event, Rajiv Bajaj (CEO of Bajaj Auto) had some other interesting things to say about other topics too.

Bajaj’s bossman was very vocal about the need for a reduction in GST (Goods and Services Tax) rates in India. As of now, the GST rate on ‘luxury items’ is 28 percent and that includes all two-wheelers with an engine capacity of less than 350cc (above 350cc, it’s pegged at 31 percent). And for this, Rajiv said that “...for it to be 28 percent here just makes no sense”, given that the equivalent of GST in major two-wheeler markets in Latin America or even ASEAN countries (Association of Southeast Asian Nations) is between 8-14 percent. He further said “...and especially when recent regulatory requirements including those pertaining to BS6 and ABS norms have as it is driven up costs so much and we can see that the motorcycle industry has not come back to its pre-Covid size…”

And we think this does make sense. Given that even the price of the best selling bike in India, the Hero Splendor Plus, now start from Rs 75,441 (ex-showroom Delhi, meaning its on-road price is close to Rs 1 lakh), motorcycles have truly become quite expensive and lowering the GST will help reduce the on-road price by a fair bit. Moreover, small-capacity bikes are, more often than not, a necessity rather than a luxury, particularly among the lower-middle class working professionals, and also gig workers. The reduction of GST will go a long way in making them more accessible to the aam aadmi.

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Further expanding on it, he expressed his desire for the government to give relatively clean fuels like CNG a bit of attention too, as it has done to EVs. He said “...as much as the government has taken a positive step with electric vehicles, making the GST on them 5 percent, I would’ve thought that some tempering