New Delhi: The country's largest two-wheeler maker Hero MotoCorp on Wednesday called for a reduction in GST rate on bikes and scooters to 18 percent from the current rate of 28 percent.
The company, which ended last year with record sales of over eighty lakh units, said the reduction in tax would provide much-needed relief to two-wheeler customers across the country.
"Given that two-wheelers provide basic mobility to the masses, there is an urgent need to reduce the GST rate on two-wheelers from the 28 percent bracket of ‘luxury goods' to that of 18 percent for mass usage items," Hero MotoCorp Chairman Pawan Munjal said in a statement.
The reduction in the tax rate would not only help millions of two-wheeler customers, but also the entire value chain dependent on the sector, he added.
"It is absolutely imperative to ensure growth in the auto sector to create and sustain inclusive economic growth," Munjal said.
He added that with the transition to BS VI emission norms, cost of two-wheelers will further go up.
"All these will put severe stress on the extremely cost-sensitive commuters, for whom the two-wheeler is a lifeline," Munjal said.
Terming 2018 as a challenging year, he added that while the continuing volatility in currency and commodities slowed down the pace of growth, the global geopolitical and trade conflicts also affected sentiments in markets and industries across the world.
Commenting on the domestic market, Munjal said the increased cost of two-wheeler insurance ahead of the festive season and the prevailing liquidity crunch in the market impacted the overall of growth in the industry during the entire third quarter.
On sales outlook for the remaining part of the fiscal, he said that with improved liquidity in the market, and the upcoming festive season in many parts of the country, the industry is expecting a positive turnaround in the fourth quarter.
In the calender year 2018, Hero MotoCorp sold 80,39,472 units of bikes and scooters, registering a growth of 11 percent over 2017.
In the April-December period of the current fiscal, the company has sold a total of 60,37,901 units, the two-wheeler major said.
In December 2018, Hero MotoCorp sold 4,53,985 units, as compared with 4,72,731 units in the year-ago period.
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Updated Date: Jan 02, 2019 11:50:11 IST