GST effect: Bajaj Auto to reduce prices on bikes by up to Rs 4,500

A reduction in prices of its motorcycles by up to Rs 4,500 was announced by Bajaj Auto on Wednesday, with immediate effect to pass on the expected benefit of GST to customers.

Taxes on motorcycles shall reduce in most states with the implementation of the Goods and Services Tax (GST) from July 1, 2017, although benefits vary for each state, and differ across motorcycle models, Bajaj Auto said in a statement.

The company has decided to offer post-GST reduced prices to customers with immediate effect from June 14, 2017 itself, it added.

"The savings will range up to Rs 4,500 depending on the model and the state in which the motorcycle is purchased", the statement said.

Read more: Businesses can opt to e-verify GST registration application via OTP

Bajaj Auto sells a range of motorcycles starting from entry level CT 100 priced at Rs 35,183 to top-end Dominar 400 tagged at Rs 1.53 lakh (ex-showroom Delhi).

Bajaj Auto President (Motorcycle Business) Eric Vas said: "With the GST implementation just round the corner, we felt that it would be appropriate to pass on this significant savings to customers."

Under GST, most of the two-wheelers will attract a tax rate of 28 per cent, lower than total tax incidence of around 30 per cent at present.

Motorcycles with engine capacity of over 350 cc will attract an additional cess of three per cent.

Already, automobile manufacturers such as Ford India, Audi, BMW and Mercedes Benz have reduced prices of their vehicles between Rs 10,000 and Rs 10 lakh to pass on the benefits of GST in June, ahead of its implementation.

Read more: GST council reduces tax levels in 66 cases including printers, insulin

Companies have found it difficult to push sales this month with customers waiting for GST implementation in expectation of prices to come down.