FADA Pleas GST Reduction on Entry-Level 2-Wheelers: Boosting Affordability

The Federation of Automobile Dealers Associations (FADA) has made a compelling request to the Central Government. The request was made to reduce (GST) rates on entry-level 2-wheelers from 28% to 18%. The request was made to revive sales of entry-level two-wheelers in India. Manish Raj Singhania, the president of FADA, voiced his worries during the Auto Retail Conclave. He highlighted that the entry-level two-wheeler sector is still dealing with the COVID-19 pandemic's effects.

As per the news report, the Indian automobile industry has shown signs of a hopeful rebound. The industry witnessed an overall retail sales rise of around 7% in the current fiscal year. However, the entry-level two-wheeler category is still lagging. FADA's President, Manish Raj Singhania, highlighted the pressing issue: "Although the two-wheeler segment experienced year-on-year growth, we are still 20% behind the pre-COVID levels".

The report added that Singhania addressed his petition to Nitin Gadkari, a prominent attendee and the Union Minister for Road Transport and Highways. He asserted, "That's why FADA strongly urges the honorable minister to help us get a reduction in the GST rate from 28 percent to 18 percent for entry-level two-wheelers, specifically the 100cc and 125cc segment".

As per FADA’s data for April through August of the current fiscal year, sales of two-wheelers increased steadily. From 62,35,642 units sold to 65,15,914 units sold, the sales witnessed a 4.49% rise YoY. According to FADA data, overall sales for the same time increased to 91,97,045 units from 86,15,337 units. The increment took place during the equivalent period of the prior fiscal year, representing an increase of 6.75% year over year.

Singhania's demand goes beyond straightforward policy modifications. Given that this sector accounts for 75% of India's overall vehicle sales volume, such a cut in GST rates will act as a big social stimulant.

The FADA's request for a GST rate reduction on entry-level two-wheelers is a move towards making these vehicles more accessible to a wider spectrum of consumers and a call for industry assistance. It is unclear how the government will respond to this proposal. But this important automobile market may result in a large price reduction. If this happens, it would be advantageous to both customers and the sector as a whole.

Stay tuned with us to know more about the two-wheeler industry. Till we get more insights about launches & teasers, read about the Arrival of Recently Launched Jawa 42 Bobber Black Mirror at Dealerships.

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