28% GST on lower-end Indian motorcycles much higher than other emerging markets: Bajaj Auto MD Rajiv Bajaj

Bajaj Auto MD Rajiv Bajaj

The Indian automobile industry is suffering from ‘over regulation’, which leads to dramatic increase in costs, said Bajaj Auto managing director Rajiv Bajaj on the sidelines of the launch of Pulsar NS400Z on May 3.

He added that motorcycles that cater to the ‘aam aadmi’ are levied a goods and services tax rate of 28 percent, which is very high compared to other developing markets.

“This kind of a dramatic change in price is because of many things, but mostly it is because of over regulation of the market,” Bajaj said.

Also read: Bajaj Auto could have done 'little more a little before' with Pulsar

"Why do we have to pay a GST of 28 percent on vehicles that the aam aadmi uses," Bajaj asked, suggesting that it hampers growth of the segment.

In most developing countries, including Asean and Latin American nations such as Brazil, the middle- to lower-end motorcycles fall in the tax bracket of 8 to 14 percent, Bajaj said.

Also read: Bajaj Auto's 'biggest' Pulsar NS400Z at Rs 1.85 lakh hopes to woo 'new buyers'

He further said the introduction of BS-VI and other policy measures to cut emissions are welcome. However, the government should rethink the tax rate levied on such vehicles. “As a father I welcome the emission norms, which will ensure clear air. But then the government should re-consider the tax rate and make it 12 or 18 percent rather than 28 percent.”

Bajaj Auto on May 3 launched its 'biggest' Pulsar - the NS400Z, which is  powered by a 373 cc engine. The bike will be available at a price of Rs 1.85 lakh ex-showroom in Delhi and the bookings are now open with an initial sum of Rs 5,000, the company said.

Also read: Bajaj Auto to launch world's first CNG-powered bike in June

Meanwhile, Bajaj also confirmed that the firm will launch its CNG-powered motorcycle on June 18, 2024. “The world’s first CNG-powered motorcycle is due next month. It halves the running costs compared to petrol-run bikes. It’s a fantastic innovation,” Bajaj said.