(MENAFN- KNN India)
New Delhi, Jan 8 (KNN) In a significant development, the Ministry of Heavy Industries (MHI) has backed a proposal by the Society of Indian Automobile Manufacturers (SIAM) to lower Goods and Services Tax (GST) on CNG-powered two-wheelers.
Currently taxed at 28 per cent, SIAM has proposed a phased reduction to 18 per cent, and eventually to 12 per cent. This move could greatly benefit Bajaj Auto, which has already captured consumer interest with its CNG-powered motorcycle launched last year.
The proposal, sent to the Finance Ministry on January 1, 2025, has found support from key ministries, including the Ministry of Road Transport and Highways, led by Nitin Gadkari, and the Ministry of Environment, Forest, and Climate Change.
The Automotive Research Association of India has also weighed in, recommending a lower GST rate for CNG two-wheelers to encourage adoption.
The Ministry of Petroleum and Natural Gas (MoPNG) has further amplified the call for tax reduction. Besides advocating for CNG two-wheelers, it has sought a similar concession for CNG-powered passenger cars.
However, MHI's communication to the revenue secretary has remained focused solely on two-wheelers, reflecting SIAM's targeted submission.
Bajaj Auto, a pioneer in this space, stands to gain significantly. The company's CNG motorcycle, launched in July 2024, has already registered impressive sales figures, with 38,172 units sold by December.
The bike has struck a chord with environmentally conscious consumers and those seeking cost-effective mobility options amid rising fuel prices.
Supporters argue that reducing GST on CNG two-wheelers will spur adoption across India, aligning with the nation's carbon neutrality goals.
The MoPNG emphasised that such measures could stimulate sales and maximise penetration, contributing to India's green mobility agenda.
The proposal also highlights a broader strategy for taxation parity in the two-wheeler segment. While SIAM has urged an immediate cut for CNG and flex-fuel two-wheelers, it has recommended a universal GST reduction to 18 per cent for all two-wheelers, with an additional cut to 12 per cent for eco-friendly variants like CNG models.
As the government considers the proposal, industry stakeholders eagerly await a decision that could redefine India's two-wheeler market.
(KNN Bureau)
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