Finance Minister Nirmala Sitharaman said Tuesday the industry suggestion to lower goods and service tax (GST) rate on two-wheelers will be taken up with the GST Council as it merits a rate revision. Currently, motorcycles, including mopeds, and cycles fitted with an auxiliary motor are charged at 28 per cent. A tax cut ahead of the festive Diwali season could help boost demand for two-wheelers.
Responding to a question at a CII interaction via a video link, about the need for lowering GST rates on two-wheelers, she said, “This was indeed a good suggestion as this category is neither a luxury nor a sin good and hence merits a rate revision. Consequently, this will be taken up with the GST Council.” The statement comes ahead of the GST Council meetings scheduled on August 27 and September 19.
She said the government will look into operational guidelines to ease pain of sectors especially impacted by the pandemic.
Speaking at the event, CII President Uday Kotak said there are signs of a nascent economic recovery from the lows in April-May, but local lockdowns have led to supply-side bottlenecks, which could impede growth when demand side cranks up.
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