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Decrease in GST for Bikes

​The Indian Government had recently hinted towards the decrease in the GST rates for two wheelers in the country which will lead to the decreased price of two wheelers. Also, this news was later confirmed by the finance minister and thus the implementation is expected for sure. This decrease in GST price can have a marginal difference in the prices of these vehicles. 

The auto industry has been demanding for a long time change and all because with changing trends the manufacturing cost was increasing and with rising retail price people were less willing to buy a vehicle. There was a significant drop in the sale of two wheelers in the last decade. This could be due to the rising cost. 

Now as excited you are to get a cheap vehicle with that you must get a two wheeler insurance policy which will keep your vehicle safe on the road and will keep you financially covered. 

How much drop one could expect?

GST rates for two wheelers currently stand at around 28% which is like the highest tax slabs. This means that if you are getting a bike of around 1 Lakh Rs, the amount of 28,000 is to pay as the Service tax to the government. The news tax slab which is supposed to be introduced will decrease this from 28% to 18% and the drop of 10% is significant for many. Due to this decision two wheeler maker like Bajaj, TVS, Hero saw the rise in their stock prices and it will allow them to have more profits and benefits. The lower retail price will also promote the sale and this often leads to innovation. This could be a big breakthrough for the industry which could be the case for their revival as well as long term growth. 

The two wheeler industry had already suffered a lot from new emission rules which were started from the compulsory inclusion of CBS or ABS braking system depending on the cubic capacity of the engine. This resulted in the rise of the manufacturing cost and thus the retail price to the customers. With high GST prices, people were not in favour of getting a vehicle which was costly and thus sales were decreasing. 


The Finance minister explained that two wheelers are not a luxury item and must not be put in a slab made for luxury goods. A lot of motor vehicle companies had previously asked for a reduction in GST price as in last decade with changing methods of braking emissions and use the industry had already suffered a lot and a high GST price was decreasing the sales.


The common result would be that these vehicles would be available to people at a much lower price and will also give the manufacturers scope to have profits which will allow them to invest more and innovate.

Another thing will be the rise in stock prices of this industry and investment would be made. Thus, the auto industry as a whole would boom. 

Buy two wheeler insurance with your new vehicle as well to have a secure and safe purchase.​