The 2 wheeler insurance sector has been impacted by GST (Goods and Services Tax) which has also impacted almost every business sector in the country. Here’s taking a look at the finer details behind the same.
When it comes to the 2 wheeler insurance sector, it has been majorly impacted by GST or the Goods and Services Tax which came into effect from the 1st of July, 2018. The two wheeler insurance industry is no exception like all other service sectors which have been affected by this landmark decision. In case you are planning a two-wheeler purchase and wish to know more about bike insurance modalities, you should learn more about the effect of GST on the same. The GST is majorly worked out based on engine capacities of the two-wheelers sold in the Indian market.
Now GST stands at 31% for two-wheelers with engine capacities of 350cc and higher which is roughly 1% more than earlier taxes that were imposed. This is something that you should know before you apply for bike insurance in this category. Additionally, vehicles with engine capacities lower than 350cc are required to fork out GST of around 28% which is lower by 2% than earlier taxes of 30% overall. Several auto companies have already updated the pricing of their two-wheeler offerings in the country based on the changes brought about by GST. Prices have actually reduced for two wheelers which is good news for prospective buyers. This will also benefit companies offering bike insurance since there will naturally be higher demand for comprehensive or third party bike insurance.
There is a price reduction on two-wheelers in the country which goes up to a whopping INR 18, 000 for specific models. This should definitely spur fence sitters who were considering a two-wheeler purchase all along. In case of premium motorcycles and scooters, the changes of 1% also have a sizable impact. For example, in case the price of a premium two wheeler works out to INR 10 lakhs then 1% translates into a hike of INR 10, 000 in prices. This may affect some buyers while some will remain unaffected.
Several two wheeler manufacturers have been delineating the impact of GST and how it changes prices to their customers in order to keep business going steadily. You should know whether the GST benefits are being transferred to you by your bike or scooter dealership. Also make sure that you purchase adequate two wheeler insurance since this is a must for future safety and protection. GST has been a game changer for mass market two wheelers since prices have come down to more competitive levels and this has naturally sparked considerable demand throughout the country. Companies like Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI) and Bajaj Auto India have benefited immensely from increased demand along with several other brands.
Author: Gaurav Mittal