Hero MotoCorp asks govt for phased GST reduction to avoid revenue losses

International News

Hero MotoCorp on Thursday urged the government to consider a phase-wise reduction in GST on automobiles, cutting rates for two-wheelers in the first stage, and deferring tax cut on four-wheelers to a later stage.
The country's largest two-wheeler maker said the move would help the government contain potential revenue loss, and at the same time provide relief to around 20 million probable two-wheeler buyers across the country.
"I understand that potential adverse impact on government revenue is becoming a constraint (for GST rate cut). While increased sales should take care of that, even if we assume a shortfall in revenue, a resolution can be found if we approach this topic in phases," Hero MotoCorp CFO Niranjan Gupta told PTI.
The government may look at reducing the GST for only two-wheelers as the first step and defer it for four-wheelers, he added.
"This will contain the potential revenue loss, and also cover around 20 million buyers," Gupta said.
To begin with, the government can even look at bringing two-wheelers up to 150 cc into the 18 per cent goods and services tax (GST) slab, he said, adding that this will provide relief to almost 16 million probable customers - mostly in small towns and rural areas - with minimal revenue impact.
"Thereafter, the same can be extended to other segments, basis the outcome and fiscal space that the government may have," Gupta said.

 The two-wheeler market in India is pegged at around 20 million units per year with lower than 150-cc bikes accounting for the bulk of sales...Read More