GST 2.0: 'Delayed decision-making impacting new vehicle sales,' says BMW's Hardeep Singh Brar

By: Prashant Singh
| Updated on: 31 Aug 2025, 15:56 pm Share via: BMW says that consumers are exercising a “wait-and-watch” approach in anticipation of policy clarity. Royal Enfield’s Siddhartha Lal has also appealed for a uniform approach on two-wheeler taxation in India.  …Read More Image: Hardeep Singh Brar, President and CEO, BMW Group India. View Personalised Offers on Check Offers As India prepares for the next phase of Goods and Services Tax (GST) reforms, announced in August 2025, the automobile industry remains cautious. BMW says that the Indian consumers have adopted a “wait and watch” approach which is impacting the new-car sales to a certain extent. BMW’s new President and CEO, Hardeep Singh Brar, in response to HT Auto’s query on GST reforms, said “The recent speculation about the change in GST rates has caused uncertainty in the minds of consumers. Consumer interest and demand is strong, but they have adopted a wait and watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level.” Brar’s statement urges the government to move swiftly on the new Goods and Services Tax (GST) rates, as the proposed restructuring has introduced a degree of uncertainty among buyers. BMW Group India, which operates in both the luxury car and premium motorcycle segments, recorded its best-ever first-half performance in 2025. Luxury cars currently attract a total tax burden of 45% to 50%. Under the proposed GST revamp, they are likely to be shifted to a lower 40% slab. “Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector’s contribution to economic growth during this quarter is robust,” Brar added. What’s the current and proposed GST structure on automobiles?The current GST framework consists of four slabs — 5%, 12%, 18% and 28%. Under the proposed restructuring, the 12% and 28% slabs will be removed, while the 5% and 18% rates will continue. In addition, a new 40% slab will be introduced specifically for luxury and sin goods. At present, India’s tax regime draws a sharp line between conventional and electric vehicles. While electric cars enjoy a concessional 5% GST with no additional cess, internal combustion engine (ICE) models face a far heavier load. These vehicles are taxed at 28% GST, and depending on their body style, size and engine specifications, an extra cess of up to 22% can be added, pushing the total levy on some models close to 50%. How are two-wheelers taxed in India?When it comes to two-wheelers, taxation also varies with engine size. All internal combustion engine (ICE) motorcycles attract a 28% GST, but while smaller models up to 350cc are spared any cess, bigger bikes face an additional 3% levy. The policy effectively makes larger-capacity motorcycles slightly more expensive while keeping mass-market models relatively accessible. Industry reports suggest that there could be two GST slabs for motorcycles – the update on which is expected to be received post the GST council meeting on September 3-4th. While the smaller entry-level two-wheelers could be taxed at 18%, higher displacement models (above 350cc) could attract a heavier tax burden. Such a move could potentially benefit commuters and entry-level motorcycles, which may become noticeably cheaper, but it poses challenges for the fast-growing middle-weight and premium segments. Royal Enfield — a global leader in the 250cc–750cc category with a presence in over 50 countries — may be among the most affected if industry reports on the revised tax structure prove accurate. Royal Enfield’s stance on GST rate change:Royal Enfield, the country’s leading mid-size motorcycle maker, has called for a uniform Goods and Services Tax (GST) rate of 18% across all two-wheelers. The company argues that the current differential tax structure risks slowing down the growth of India’s fast-expanding mid-capacity motorcycle segment. “Lowering GST for under-350cc will help broaden access, but raising GST for above-350cc would damage a segment vital to India’s global edge,” Royal Enfield Managing Director Siddhartha Lal wrote in an Instagram post. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 31 Aug 2025, 15:56 pm IST
Source: hindustantimes.com