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GST council to look into reducing tax rate for two wheelers

  • Oct 12, 2020 | Divita S Gupta

GST council to look into reducing tax rate for two wheelers

Union corporate affairs and finance minister, Nirmala Sitharaman has announced that the Goods and Services Tax Council is likely to look into reducing the tax slab and rate for two wheelers after demands from the auto industry. At present, two wheelers are classified under the highest slap rate of 28%. 

Nirmala Sitharaman stated, “Since two-wheelers are neither a luxury nor a sin product, they merit a rate revision. Consequently, this will be taken up with the GST Council.” This announcement was made during an interaction with members of the Confederation of Indian Industry. 

The revenue and growth of passenger vehicles manufacturing and distribution industry has taken a severe hit in the last year and has been requesting the Centre to consider a phase-wise reduction in rate of GST on automobiles, starting with two wheelers and then moving to four wheelers. The automobile industry has said that a rate cut will contain potential revenue losses to the Government and also provide tax relief to close to 20 million potential customers looking to purchase two wheelers.


Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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