The Society of Indian Automobile Manufacturers (Siam) has written a letter to the Ministry of Heavy Industries, seeking a reduction in the goods and services tax (GST) on low-carbon two-wheelers.

Siam contended that this is the most direct and cleanest method for achieving the desired outcome without the need for subsidy.

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The request of GST reduction included for internal combustion engine (ICE) flex-fuel two-wheelers and ICE compressed natural gas (CNG) two-wheelers, from 28 per cent to 18 per cent without any cess on 350-plus cc two-wheelers, until the GST base rate for all two-wheelers is lowered to 18 per cent .

In its letter, SIAM highlighted the high GST tax for two-wheelers in India compared to other countries, such as 28 per cent in India versus 9.25 per cent in Brazil, 10 per cent in Vietnam, 7 per cent in Thailand and 11 per cent in Indonesia, among others.

Siam added in the letter that India should reduce the GST across all two-wheelers from 28 per cent to 18 per cent, a long-standing demand from the industry.

It is to be noted that the operating expenses for CNG are half that of petrol emissions and closer to electric vehicle levels, without the safety, range, charging, and battery disposal concerns associated with electric two-wheelers.

Recently, Siam released data of the wholesales of Passenger Vehicle (PV) in India saying that it has spiked by 4 per cent year-on-year in May to 347,492 units, as compared to the same month last year.

In May 2023, the overall passenger vehicle dispatches from companies to dealers stood at 3,34,537 units.

Two-wheeler sales rose 10 per cent to 1,620,084 units last month as compared to 1,471,550 units in the year-ago period.

Three-wheeler dispatches rose 15 per cent to 55,763 units in May, as against 48,610 units in May 2023.