India is a country that has a deep love for two-wheelers. They are not just a mode of transportation, but also a symbol of freedom and adventure. In recent years, the market for two-wheelers has seen a significant growth, with a wide range of options available for consumers. However, there is a segment of the market that has been struggling to gain traction – motorcycles above 350cc.
According to recent reports, motorcycles above 350cc make up only 1% of the total two-wheeler market in India. This is a stark contrast to the popularity of smaller motorcycles and scooters, which dominate the market. Despite this, the government has proposed to raise the Goods and Services Tax (GST) on these motorcycles, which could have a detrimental effect on the segment.
The proposed increase in GST on motorcycles above 350cc has sparked a debate among industry experts and enthusiasts. While some argue that it will bring in additional revenue for the government, others believe that it will have a negative impact on the segment. Let us delve deeper into this issue and understand why raising GST on these motorcycles may not be a wise decision.
Firstly, let us look at the revenue aspect. As mentioned earlier, motorcycles above 350cc make up only 1% of the total two-wheeler market in India. This means that the potential revenue generated from this segment is already limited. By raising the GST, the government may be able to generate some additional revenue, but it will be negligible in comparison to the overall revenue generated from the two-wheeler market. In fact, it may even discourage potential buyers from investing in these motorcycles, leading to a decrease in revenue.
Moreover, the proposed increase in GST may also have a negative impact on the segment itself. Motorcycles above 350cc are considered to be premium bikes, with higher engine capacity and advanced features. They cater to a niche market of enthusiasts who are willing to pay a premium for these bikes. However, with the increase in GST, the prices of these motorcycles will also increase, making them even more expensive. This will make it difficult for the segment to attract new buyers and may even lead to a decline in sales.
Another important aspect to consider is the impact on the manufacturers. The increase in GST will not only affect the buyers but also the manufacturers of these motorcycles. With the rise in prices, the demand for these bikes may decrease, leading to a decrease in production. This, in turn, will have a ripple effect on the entire industry, including the suppliers and dealers. It may also lead to job losses and a slowdown in the growth of the industry.
Furthermore, the increase in GST may also discourage foreign manufacturers from investing in the Indian market. India is a growing market for premium motorcycles, and many international brands have entered the market in recent years. However, with the proposed increase in GST, these manufacturers may reconsider their plans and look for other markets with more favorable tax policies. This will not only affect the segment but also the overall growth of the two-wheeler industry in India.
In conclusion, raising GST on motorcycles above 350cc may seem like a viable option to generate additional revenue for the government. However, it is important to consider the potential impact it may have on the segment and the industry as a whole. The limited revenue generated from this segment and the potential decline in sales and production may outweigh the benefits of the increased GST. It is crucial for the government to carefully evaluate the consequences before making a decision that could have a long-term impact on the two-wheeler market in India.
As a country that takes pride in its love for two-wheelers, it is important to support and nurture all segments of the market. The government should consider alternative measures to generate revenue rather than burdening a small segment of the market. It is also essential for the industry and the government to work together to find solutions that will benefit both parties. Let us hope that the proposed increase in GST on motorcycles above 350cc is reconsidered, and the segment can continue to thrive and contribute to the growth of the two-wheeler market in India.
