Goods and Services Tax (GST) has come into effect from 1st of July this year and it has been a mixed for automobile manufacturers. While few segments are gaining positive traction with a price reduction post GST, 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%. Since Royal Enfield has bikes with engine capacities at either ends of the spectrum, its bikes have witnessed both a price decrease and increase depending on their engine capacity.
The entry-level Bullet 350 which carried a price tag of Rs 1.28 lakh, on-road, Chennai will now be cheaper by Rs 1,661 and cost roughly Rs 1.26 lakh. The Electra, Classic 350 and the Thunderbird 350 have also witnessed a price drop of Rs 2,211, Rs 2,015 and Rs 2,165. The larger capacity motorcycles (>350cc) bearing Royal Enfield name tag which include the Classic 500, Classic Desert Storm, Classic Chrome, Thunderbird 500, Bullet 500, Continental GT and the Himalayan will now see a slight rise in on-road prices. The Classic 500 will be costlier by Rs 1,490 and now cost Rs 1.95 lakh, on-road in Chennai while the Classic Chrome will now retail at Rs 1.98 lakh. The most expensive Royal Enfield, the Continental GT would see a negligible rise of Rs 301 to Rs 2,31,637, on-road in Chennai. The Bullet 500 and the Himalayan will now cost Rs 1,169 and Rs 2,717 more over their pre-GST prices.
With this new pricing, Royal Enfield has adapted its product line to the new tax regime. With already test mules of Continental GT 750 spotted testing in and around Chennai, it is only a matter of time before it gets launched. Would be interesting to see how Royal Enfield prices its soon to be launched high end model.