There is also a
requirement for income tax rationalisation to enable middle-income people start
spending again, Honda
Motorcycle and Scooter India (HMSI) Director Sales and Marketing Yogesh Mathur told PTI in an
interview. In the ongoing fiscal, motorcycle sales have underperformed compared to
scooters due to softness in demand from rural market, including delayed
monsoons, he added. "From the rationalisation of GST (point of view), we have been requesting the
government to really take care of (it) because two-wheelers are actually not a
luxury. It is a necessity for our people
to commute," Mathur said when asked about demands from the industry
for a cut in taxes on two-wheelers. He pointed out that currently, the
last-mile connectivity is not there yet in India and even the public transport is also not adequate and sufficient to take
care of the growing population, especially the “urban areas which are choked
right now”. "We understand that two-wheeler still holds a necessity
value, rather than the luxury...So from that perspective, in the personal
mobility space, even two-wheeler becomes a necessity, and that necessity should
not be taxed at 28 per cent, that's what our request from the industry body is
there to the government," he added.
Under the present
regulations, two-wheelers up to 350cc engine are taxed at 28 per cent GST, while
those above 350 cc engine attract 3 per cent cess, taking total tax payable to
31 per cent.
Rationalisation in GST will provide relief to the
two-wheeler industry which is facing demand headwinds due to less spending by
prospective consumers and also increasing costs of vehicles due to compliance
of new regulations, he said.
.Mathur said"Farmers
currently are also not getting the proper support of the MSPs. That is a
challenge. So, money is limited only to certain people, and now the regulation
change has also impacted the overall cost of the product being higher. Mathur
cited examples of emission norm changes from BS IV to BS VI, and On-Board
Diagnostic (OBD) 2A to OBD2B set to come in from April 1 which have pushed up
the cost of two-wheelers. "The price
increase is phenomenal, which has created a problem in terms of affordability
for the people. So that's a challenge and that cannot be immediately
addressed. It can be addressed only if surplus money is available in the hands
of the consumers to spend with," he noted. Due to these factors, in terms
of industry growth, Mathur said, "We expect that next fiscal year to be
high single-digit growth of the two-wheeler market. As for the ongoing fiscal, he said, "We are expecting 10 to 12 per
cent growth.
He said motorcycle demand in rural markets was
impacted this fiscal as 'marriage dates' were absent in the first quarter,
which is one of the two big seasons for high sales along with the Diwali
period. Moreover, the general
elections also had an impact on rural demand for motorcycles as consumers were
busy with the exercise, he added.
Yet, Mathur said, "Marriages will resume from February
onwards with an extended wedding season till June. So we are expecting that the
first quarter (next fiscal) will be better, which should support motorcycle
growth going forward.”