FADA seeks reduction in GST rates for entry-level two-wheelers to 18 per cent

New Delhi: The Federation of Automobile Dealers Associations on Thursday asked for the reduction in GST rates on entry-level two-wheelers to 18 per cent, saying the segment has not recovered from the impact of COVID-19 pandemic.

Speaking at the Auto Retail Conclave here, Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in the ongoing fiscal so far, while the retail sales of total vehicles have grown by around seven per cent, the entry-level two-wheeler segment is yet to witness the robust growth seen.

"Although the two-wheelers segment experienced year-on-year growth, we are still 20 per cent behind the pre-COVID levels," Singhania said. Turning to Union Road Transport and Highways Minister Nitin Gadkari, who was the chief guest at the function, he said, "That's why FADA strongly urges honourable minister to help us get a reduction in GST rate from 28 per cent to 18 per cent for entry-level two-wheelers that is the 100cc and 125cc segment."

He further said, "This would not be merely a policy adjustment, it would act as a social economic catalyst, especially considering this segment constitutes 75 per cent of our total auto sales volume."

According to FADA data, in the April to August period this fiscal, two-wheeler sales were at 65,15,914 units as against 62,35,642 units, a growth of 4.49 per cent. Total vehicle sales across categories in the April-August period of the ongoing fiscal stood at 91,97,045 units, as compared to 86,15,337 units in the corresponding period last fiscal, a growth of 6.75 per cent, as per FADA.