Reducing goods and services tax (GST) on two-wheelers to 18 percent from the highest slab of 28 percent currently, could make bikes cheaper by up to Rs 10,000, said Rajiv Bajaj, Managing Director at Bajaj Auto.
“Lot of pain in the market has been aggravated with high GST rate. Prices of two-wheelers could reduce by Rs 8,000 to Rs 10,000 if the GST rate is lowered to 18 percent,” Bajaj told CNBC-TV18.
The cut in export incentives has been another shocker. Bajaj Auto has lost close to Rs 300 crore due to the ceiling on export incentives, he said.
Bajaj said the government needed to give consumers incentives at a time when jobs have been lost and affordability is low. “Overregulation has led to a 30-35 percent increase in prices for consumers and cost to the consumer needs to be brought down,” he added.
The government, he said, should focus on export incentives for companies that have the scale to become global players.
Bajaj’s comments on the GST rate come after Finance Minister Nirmala Sitharaman on August 24 said two-wheelers are neither a luxury nor sin product, adding the GST Council will look into the industry's demand to lower the GST rate.Country's largest two-wheeler maker Hero MotoCorp had last year urged the government to consider a phase-wise cut in GST rates in the segment.