Tax Reduction On Two-Wheelers: FADA Signals Decline In Sales Of Two-Wheelers, Calls On Government To Reduce GST

For many Indian middle-class families, two-wheelers remain their primary mode of transportation. However, the cost of two-wheelers has increased, with virtually all of them costing more than Rs 1 lakh. The Federation of Automobile Dealers Associations (FADA) has requested the government to lower the GST on affordable two-wheelers from 28 to 18 percent in response to the soaring costs of two-wheelers in India.

GST Tax Abatement
Since the COVID-19 epidemic, FADA has raised the concern that sales of reasonably priced two-wheelers haven’t increased. Sales this year have grown by just 7%, according to Manish Raj Singhania, President of FADA, which is hardly a significant comeback.

These reasonably priced two-wheelers are classified as 100cc and 125cc two-wheelers. According to FADA’s figures, just 65,15,914 of these two-wheelers were sold between April 2023 and August 2023, a 4.49 percentage point increase over the same period previous year. The FADA also reported that total vehicle sales for this time period in the current fiscal year reached 91,97,045 units, a 6.75 percent rise over the same time period in 2016.

FADA has chosen to raise this issue with the government after carefully analyzing this data in order to assist two-wheeler producers and dealers in increasing their sales while also providing a perk to consumers.

Describe FADA.
FADA was founded in 1964 as the Federation of Automobile Dealers Associations. It is regarded as India’s top regulatory organization for the retail market for automobiles. FADA is essential to the smooth distribution, service, and sales of a wide range of vehicles, including tractors, passenger cars, SUVs, two-wheelers, and commercial trucks and buses.

According to material on FADA’s official website, FADA India represents approximately 15,000 car dealers throughout a vast network of 26,500 outlets. Additionally, FADA works together with various regional, state, and local vehicle dealer organizations to advance the goals and welfare of the nation’s entire automotive retail sector.