GST Effect On Bikes: TVS Announces Benefits, Premium Bikes May Cost More

When the Goods and Sales Tax (GST) is implemented from 1 July 2017, taxes on many two-wheelers are expected to reduce in most states. The benefits, in terms of final prices, will be passed on to consumers, some two-wheeler manufacturers say. TVS Motor Company has also announced that benefits under GST will be passed on to customers, without going into details of what kind of benefits these will be. CarandBike reached out to Yamaha and Hero MotoCorp as well, but so far there is no word on any GST benefits being extended on Yamaha and Hero bikes.

(TVS will be offering price cuts on its models post GST roll-out)

"We are very optimistic about GST which is a landmark reform. It will bring in a lot of ease in doing business. We will be passing on the benefits to our customers," said K N Radhakrishnan, President and CEO, TVS Motor Company. The company however, didn't get into details of what kind of price discounts customers will receive, when GST is rolled out from 1 July.

CarandBike tried reaching out to Hero MotoCorp and Yamaha, but there has been no response on whether these companies will be extending GST benefits on their products to customers. Dealers are also cautiously optimistic about any GST impact on prices of two-wheelers. One Hero dealer we reached out to said that GST benefits are being offered on Hero scooters, but so far, there's been no response from the company on any GST effect on prices. A Yamaha dealer in NCR said so far, the GST impact isn't so apparent yet to offer any discounts on prices.

(Bajaj has also announced price cuts up to the tune of Rs. 4,500)

Bajaj Auto has already announced that prices of its motorcycles will be reduced by up to Rs. 4,500, while UM has cut prices of its two models in the Renegade range by up to Rs. 5,700. Honda Motorcycle and Scooter India have also announced that prices of its two-wheeler range will get discounts of between 3 to 5 per cent.

(Prices of Royal Enfield bikes will go down as well)

Prices of Royal Enfield bikes will also go down, once GST is implemented, but these price reductions will be limited to 350 cc motorcycles in the Royal Enfield portfolio. These bikes, with actual engine capacity of 346 cc, just makes it to the 28 per cent flat GST, but motorcycles with engine displacement of over 350 cc will attract an additional cess of 3 per cent. So, Royal Enfield's Himalayan (411 cc) and its models above 500 cc will cost more.

(Premium bikes will cost more once GST is rolled out)

Premium bikes, including those assembled in India are also likely to cost more. But actual price difference is yet to be worked out. A source familiar with a superbike brand told CarandBike that prices of these bikes will vary from state to state. "In some states, actual on-road prices may increase, but in some other states, where current state taxes are high, GST may actually see prices reduce than what the current prices are."

So, expect prices of popular models from the likes of Triumph and Ducati to be expensive in general, but in states like Maharashtra, where VAT and octroi charges make these bikes more expensive, may see prices go down marginally after GST is rolled out. Most manufacturers are still adopting a wait and watch policy before making any official announcement.