New Delhi: The Federation of Automobile Dealers Associations (FADA) has called for a reduction in Goods and Services Tax (GST) rates on entry-level two-wheelers from 28 percent to 18 percent. FADA President Manish Raj Singhania made this appeal during the Auto Retail Conclave, highlighting the sector’s struggle to recover fully from the COVID-19 pandemic’s impact.
Challenging Recovery for Entry-Level 2Ws
Singhania emphasized that while the retail sales of total vehicles have seen a 7 percent growth in the ongoing fiscal year, the entry-level two-wheeler segment is lagging behind. He noted, “Although the two-wheeler segment experienced year-on-year growth, we are still 20 percent behind the pre-COVID levels.”
FADA’s Plea to Minister Nitin Gadkari
Addressing Union Road Transport and Highways Minister Nitin Gadkari, who was present at the event, Singhania urged for the reduction in GST rates for entry-level two-wheelers, specifically in the 100cc and 125cc segment. He stated, “This would not be merely a policy adjustment; it would act as a socioeconomic catalyst, especially considering this segment constitutes 75 percent of our total auto sales volume.”
Growth in Two-Wheeler Sales
According to FADA data, during the April to August period of the current fiscal year, two-wheeler sales reached 65,15,914 units, marking a growth of 4.49 percent compared to the previous year. In contrast, total vehicle sales across categories for the same period stood at 91,97,045 units, reflecting a growth of 6.75 percent compared to the corresponding period in the previous fiscal year.
FADA’s appeal for a GST rate reduction aims to boost the entry-level two-wheeler segment and help it regain pre-pandemic levels of sales.