In a statement, FADA said that the intervention is aimed at making two-wheelers more affordable, reviving demand and reinvigorating the industry which has seen a significant slump in sales over the past few years. 

FADA says that it has submitted its request for GST rate reduction on two-wheelers to Finance Minister, chair of the GST Council, all GST Council members, the Ministry of Heavy Industries, which supervises the automobile sector and the Ministry of Road Transport & Highways. 

Prices of two-wheelers have increased significantly over the past years. Rising cost of raw materials, stricter emission norms and higher taxes and levies are some of the possible reasons behind the price rise that FADA says has impacted the affordability for consumers across the country.

For instance, Honda Activa's price has increased from ₹52,000 in 2016 to ₹88,000 in 2023. Similarly, Bajaj Pulsar that could be purchased at ₹72,000 in 2016 now costs ₹1,50,000. FADA says that the continuous rise in two-wheeler prices has consequently led to a decline in sales. 

Two-wheelers accounted for 78% of the total automobile sales in the country in 2016. Due to increasing prices, the contribution has decreased to 72% in 2023, the automobile body emphasizes.

FADA believes that a reduction in the GST rate will address several critical issues facing the industry, including rural distress, the transition from BS-4 to BS-6 emission norms and the sharp increase in two-wheeler prices. 

"Lowering the GST rate will enhance the competitiveness of two-wheelers compared to other transportation modes, thereby increasing sales and revenue for the industry," it says.

"Moreover, the reduction in GST on two-wheelers will also positively influence the environment, as they are more fuel-efficient and emit fewer pollutants compared to other transportation modes," the automobile body added.