With the implementation of GST, KTM passes on GST benefits to its customers.
Goods and Services Tax (GST) which had come into effect from 1st of July this year has had a mixed response from automobile manufacturers. While few segments have to gain through the introduction of GST with a price reduction, few other segments’ products are finding themselves priced higher post the implementation.
As per the earlier tax structure, the ex-showroom price included Excise Duty, CST (Central Sales Tax), VAT (Value Added Tax) and NCCD (National Contingency Calamity Duty) which totalled to 30.2 percent tax on two-wheelers irrespective of any two wheeler segment.But now, post the implementation of GST, a standard GST tax is levied on the motorcycles along with an additional cess depending on the motorcycle segment.
For example, vehicles having engine capacity less than 350 cc would attract a GST of 28% plus an additional cess of 1% totalling to 29% while two wheelers with capacity greater than that would attract a 28% GST with an additional 3% cess totalling 31%.KTM has three motorcycles which have an engine capacity of less than 350cc and KTM has reduced the pricing of the three in line with the GST. Also, as per the new tax structure, motorcycles above 350cc will be taxed at 31 percent, which is higher than the earlier tax structure and hence this should lead to upward revision of prices. However, interestingly, KTM has announced a price cut on the 390 Duke and the RC 390 as well which should make die hard KTM fans rejoice in delight.
Ex-showroom prices of the sub 350cc KTM range including the 200 Duke, RC 200 and 250 Duke have been reduced by upto Rs. 8,600 post GST. Even with an additional cess of 3% on 350cc+ motorcycles, KTM has reduced the ex-showroom prices of the 390 Duke and the RC 390 by upto Rs. 5,900.
The rate of reduction varies across locations depending on the VAT rates applicable prior to GST.For example, in Mumbai, the effect of GST on KTM pricing is as follows:
Post GST price of the 200 Duke: Rs 1,44,966
Price reduction: Rs 6,774
Post GST price of the RC 200: Rs 1,73,690
Price reduction: Rs 8,111
Post GST price of the 250 Duke: Rs 1,74,586
Price reduction: Rs 8,143
Post GST price of the RC 390: Rs 2,33,134
Price reduction: Rs 5,301
Post GST price of the 390 Duke: Rs 2,28,313
Price reduction: Rs 5,205