If the government cuts Goods and Services Tax (GST) on two-wheelers it will be a very welcome move as they are a common man’s vehicle, Rakesh Sharma, Executive Director at Bajaj Auto told Zee Business Managing Editor Anil Singhvi in an exclusive chat. As a representative of the two-wheeler segment, the company has been advocating tax cuts as they are quite hefty, he said. (#NewsParViews) 

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If there is a rate cut, as has been indicated by the Finance Minister on Tuesday, it will be in the right direction, Sharma said. It will also increase penetration of two wheelers in the country, he added.  

Giving example of Indonesia, where the per capita income is comparable to India, Sharma said that there were 225 vehicles per 1000 people. In India this number is 170 per 1000 people, he said pointing to a big gap.

 

The increase in demand will help the industry and also create employment opportunities. If the capacity is increased domestically, it will further augment the offshore capacity, he added. The international business stands on the shoulders of the domestic business, he further said. The Executive Director said that this is one industry which has the potential to dominate the world.  

Sharma said that the government should take a call on it in an expeditious way whether to retain existing rate or cut it. Otherwise, it will give a confusing signal to customers whether they should hold their purchase or buy, he said. 

The sector is recovering from the Covid-19 impact and is heading towards festive season. Any uncertainty on this issue may be counterproductive for the industry, he added. 

The two-wheeler industry will suffer if the decision is not taken quickly. He said that the decision should come fast, one way or the other. 

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Nirmala Sitharaman had on Tuesday indicated that the issue of GST rate cut on two-wheelers will be taken up by the GST council during its meeting.