There are just a few days remaining for the GST implementation to take place. Many buyers are in the state of dilemma whether to buy vehicles before or after the implementation of the GST . Many buyers have postponed their purchase to next month. This has caused a dip in sales. To counter this, many manufacturers especially bike makers have started offering heavy discounts on their products. In this post we are coming up with the details of discounts and price cuts being offered to prospective new bike buyers before GST implementation. Here’s all the info about the new bike price drop after the announcement of GST in India.
First lets have an insight of GST when it comes to two wheelers. The GST applicable on two-wheelers (bikes, scooters and mopeds) is 28 percent. Apart from this, there is a 3 percent cess on two-wheelers with engines bigger than 350cc. So, if we calculate the overall effect of GST on a two wheeler with engine displacement below 350 cc, there would not be much increase or decrease in price.
But, the 3 percent cess will affect manufacturers which have two wheelers above 350 cc in their line up. One such bike maker is KTM. They might have to decide to increase the prices to curtail the loss in their profit margins. Following are the discounts on bike prices after announcement of GST i.e applicable till 30th June 2017.
Also Read- How will GST Affect Car Prices in India
Discount on Bike Prices after GST Announcement
Since many prospective buyers have postponed their purchase of bike till ext month, there is a considerable decline in the sales of motorcycles. This has forced bike manufacturers like Bajaj Auto and Royal Enfield to provide discounts on their bikes. With GST getting implemented from the 1st of July, the latest price drop is effective only till the 30th of June. Here are the details of the discounts offered by Bajaj and Royal Enfield.
GST IMPACT – Discount on Bajaj Bikes
Bajaj Auto has started offering discounts and price cuts of upto Rs 4,500 on its entire range of bikes. Quite obviously, the exact amount of discount depends on the model as well as the state from which the bike is purchased.
Eric Vas, President, Motorcycle Business, Bajaj Auto said on the price cut “As a responsible corporate, Bajaj Auto is happy to pass on the price saving accruing out of GST to its customers. With the GST implementation just around the corner we felt that it would be appropriate to pass on this significant savings to customers. Bajaj Auto is proud to be the first and only motorcycle company in India, to offer post GST reduced prices to customers even before the implementation date. Customers no longer need to wait for 1st July to buy their desired Bajaj Motorcycle.”
Bajaj started this discount on the 14th of June and is applicable till 30th of June 2017.
GST IMPACT – Discount on Royal Enfield Bikes
Like Bajaj Auto, Royal Enfield has also started passing benefits to customers ahead of GST implementation.Royal Enfield made an official announcement regarding passing on the GST benefits on the on-road price of its bikes from 17th June onward.
Rudratej (Rudy) Singh, President Royal Enfield, speaking on passing the GST benifits to the customers said, “Royal Enfield welcomes the Goods and Services Tax (GST) reform initiative by the Government of India. We believe that GST will transform the way business is done in India thus benefitting the economy and our customers. Royal Enfield is preemptively extending the GST benefits to its customers and is ready to implement the on-road price revision on purchases beginning 17th June 2017 on products where applicable. We are committed to delivering customer satisfaction and giving authentic, pure motorcycling experience to our community and customers”
It is important to mention here that many Royal Enfield 350 bikes, have a 346cc engine. Hence they won’t be affected by the 3 percent additional cess on bikes with engine bigger than 350cc.
GST IMPACT – Rise in price of electric bikes after GST
Electric bikes would get a significant price rise after GST implementation. The electric bikes will fall under the 12% GST rate. They will also no longer benefit from any tax incentive. This would be a big blow to manufacturers who had production of electric bikes in their pipeline.
GST IMPACT – Rise in Bike Maintenance Prices After GST
The major impact GST would have is on the service costs of two wheelers. The proposed GST rate on spares is 28 %, whereas the service side will see an increase of 3% in rate. This would lead to higher labor charges and hence, a rise in servicing costs of your two wheelers.