New Delhi: Two-wheeler makers TVS Motor Company and Royal Enfield have become the latest to pass on expected benefit of goods and services tax (GST) to customers by lowering prices of their vehicles.
Niche bike maker Royal Enfield has reduced prices of its models by up to Rs2,300 (on-road Chennai) while TVS Motors did not disclose quantum of price cut on its product portfolio. Royal Enfield, which is a part of Eicher Motors, currently sells a range of motorcycles, including Bullet, Classic and Thunderbird.
“The slab for reduction is expected to be between Rs1,600-2,300 on road Chennai. The reduced slab shall vary from state to state,” a company spokesperson said. TVS Motor Company president and CEO K N Radhakrishnan said the GST would bring a lot of ease in doing business. “We will be passing on the benefits to our customers,” he added.
Taxes on motorcycles are expected to reduce in most states with the implementation of GST from 1 July 2017, although benefits vary from state to state.
Under GST, most of the two-wheelers will attract a tax rate of 28%, lower than total tax incidence of around 30% at present. Motorcycles with engine capacity of over 350 cc, however, will attract an additional cess of 3%.
Already, Bajaj Auto and UM Lohia Two Wheelers have announced a reduction in prices of their motorcycles to pass on the expected benefits of GST to customers. Bajaj has reduced prices of its motorcycles—from CT 100 to Dominar 400—by up to Rs4,500 while UM Lohia Two Wheelers has cut prices of its two models by up to Rs5,700. Besides, automobile manufacturers such as Ford India, Audi, BMW and Mercedes-Benz have reduced prices of their vehicles between Rs10,000 and Rs10 lakh to pass on the benefits of GST in June, ahead of its implementation.