Honda Motorcycle and Scooter India (HMSI) have announced that it will pass on the full benefit of any reduction in Goods and Services Tax (GST) to its customers. At present, two-wheelers are taxed at 28 percent, which is the highest GST bracket. If the rate is lowered to 18 percent, as the industry has been requesting for years, prices of Honda motorcycles and scooters could come down by as much as ₹18,000 depending on the model and the state.
This announcement also works as a reminder to policymakers. For years, the automobile industry has argued that two-wheelers should not be treated like luxury items or sin goods. They are, for millions of Indians, a daily necessity for commuting and essential travel.
Key Takeaways
• Honda will cut prices of two-wheelers if the government reduces GST.
• Two-wheelers are currently taxed at 28%, and the industry wants this reduced to 18%.
• The actual price cut will depend on the model, with premium motorcycles seeing reductions of up to ₹18,000.
• Mass-market scooters such as the Honda Activa may see a reduction in the range of ₹8,000 to ₹9,000.
• Industry leaders argue that two-wheelers should not be taxed in the same bracket as luxury products.
Yadvinder Singh Guleria, Senior Vice President of Sales and Marketing at HMSI, confirmed that the company is fully prepared to transfer the benefit directly to customers once any government notification is issued. The final price cut would vary depending on the vehicle’s ex-showroom price. For example, the Honda CBR250R could see one of the steepest reductions, while popular scooters like the Honda Activa would still offer customers meaningful savings.
The decision on tax rates, however, rests with the GST Council, headed by the Union Finance Minister. Although the idea of reducing the slab for two-wheelers has been under discussion for quite some time, no official decision has been made. Industry experts believe that if the rate is lowered, it could not only ease financial pressure on consumers but also give a significant boost to sales, which in turn would help the broader manufacturing sector and the economy.
Other two-wheeler makers have expressed similar intentions, suggesting that if the GST Council does move forward, the benefit will likely be passed on across the industry. For customers, this could make an immediate difference in affordability, especially at a time when two-wheelers remain one of the most practical and necessary means of daily transport.
Frequently Asked Questions (FAQs)
Q. Why is the GST on two-wheelers so high?
A. Two-wheelers are placed in the 28% GST slab, which is the highest rate, typically reserved for what are considered luxury items or sin goods. The auto industry has been consistently lobbying to change this classification.
Q. Will all Honda bikes and scooters get a ₹18,000 price cut?
A. No, the price cut will not be uniform. The amount of reduction depends on the ex-showroom price of the vehicle. More expensive models will see a larger price drop, while entry-level models will have a smaller reduction. The figure of ₹18,000 is the approximate maximum benefit on a higher-priced model.
Q. When will the prices of Honda two-wheelers come down?
A. The price reduction is entirely dependent on the GST Council’s decision. Honda will only lower the prices after the government officially announces a reduction in the GST rate for two-wheelers from 28% to 18%.
Q. Have other two-wheeler companies made similar promises?
A. Yes, other major players in the Indian two-wheeler market, such as Hero MotoCorp and TVS Motor Company, have also stated in the past that they would pass on the benefits of a GST rate cut to their customers.
