TVS Motor Company on Tuesday joined the chorus calling for reduction in Goods and Service Tax (GST) rate on two-wheelers, saying the mass mobility item should not be bench-marked against luxury goods.

Last week, the chairman of the country’s largest two-wheeler maker, Hero MotoCorp, Pawan Munjal had called for GST rate cut on bikes and scooters to 18 per cent from the current rate of 28 per cent.

“Given the importance of the two—wheeler segment as an item for mass mobility, the GST rates for two-wheelers undoubtedly needs to be reconsidered,” said Venu Srinivasan, Chairman, TVS Motor Company.

He further said rising urbanisation, increasing purchasing power and the enhanced need for connectivity particularly in the mid-sized and smaller cities across India, has fuelled the two-wheeler revolution for personal mobility.

“It (two-wheeler) certainly cannot be benchmarked against the prevalent GST rates for luxury goods at 28 per cent, especially given the current state of inconsistencies with the integrated multi-modal public transport systems across India,” he added.

Srinivasan further said with new safety norms and BSVI integration also around the corner, both of which will increase two-wheeler prices, “It has become even more imperative to re-look at the GST rates for two wheelers to ensure social inclusion that is sustainable in the longer run.”

Last week, Munjal had stated that reduction in tax rate would not only help millions of two-wheeler customers, but also the entire value chain dependent on the sector.

He stated that such a step was absolutely imperative to ensure growth in the auto sector to create and sustain inclusive economic growth.

Rajiv Bajaj, Bajaj Auto Managing Director, also reportedly supported the demand for cut in GST on two-wheeler stating such a step would help mitigate increase in costs that would come with the implementation of new safety and emission norms.

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