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Two-wheelers neither a luxury nor sin goods; the government may propose tax cut on two-wheelers: Finance minister

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Two-wheelers neither a luxury nor sin goods; the government may propose tax cut on two-wheelers: Finance minister

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Finance Minister Nirmala Sitharaman on Tuesday during an interaction with the industry said two-wheelers are neither a luxury nor sin goods.

Finance Minister Nirmala Sitharaman on Tuesday during an interaction with the industry said two-wheelers are neither a luxury nor sin goods. She added that a proposal to reduce the tax on two-wheelers will be taken up with the Goods and Services Tax (GST) Council.

Two-wheelers currently attract 28 per cent GST. The statement comes ahead of a Council meeting on September 19, 2020

A statement issued by the Confederation of Indian Industries (CII) said the finance minister has said a rate revision proposal would be taken up by the GST Council.

The statement said, responding to a question about the need for lowering GST rates on two-wheelers, she assured that this was indeed a good suggestion (from the industry) as this category is neither a luxury nor a sin good and hence merits a rate revision. Consequently, this will be taken up with the GST Council".

The tax cut, if the proposal is approved during the council meeting, is likely to spur the demand of the two-wheelers ahead of the festive season after the sector has witnessed a sluggish demand due to COVID-19 pandemic and consequent lockdown.

Last year, the country's largest two-wheeler maker Hero MotoCorp had urged the government to consider a phase-wise reduction in GST on the segment, starting with bringing bikes up to 150cc into the 18 per cent slab.

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