Should imported high end motorcycles be taxed in India?
In this age of internet and globalization, we get to see some amazing technologies from across the planet. Some of these are consumer goods and it is human desire to want to enjoy them. In this blog I would like to talk about motorcycles.
India is the world's second largest 2 wheeler market behind china selling 20 million 2 wheelers per annum. Now there are many motorcycle companies in India. But the Indian companies tend to focus on lower powered motorcycles which get the job done of transporting people from A to B. This is mainly because India's per capita income is not so great. But not all Indians are poor. In fact some of them are doing moderately well if not exceedingly well.
And in this group some have a interest to ride and explore, maybe on some good motorcycles. Maybe they can afford the mileage if it drops from 40 kmpl to 25 kmpl. But they certainly can't or won't afford a bike which costs 6 Lakhs INR instead of 3 Lakhs INR because of taxes.
The Indian government wants to protect the domestic companies. But if they are not manufacturing higher displacement motorcycles, then they certainly do not need protection from someone who is manufacturing and selling them.
What the government can do is make a law that if the imported bikes start selling beyond a certain number then it can be taxed to convince these companies that there is a good enough market and they should manufacture locally. But taxing each and every bike which comes in the CBU route with such a high percentage is not very bright. Maybe selling more foreign bikes with less taxes will even convince the Indian companies to make high end powerful yet refined products. This will make them invest into R&D and make the products export capable to Europe and USA.
Waiting for the day when a Bajaj/ TVS/Hero can manufacture this beauty below. Till then don't tax so much on foreign products. Taxing 5 bikes a year won't fill your coffers but it can make a Indian buyer who can just about manage the to buy the bike without tax, can never buy it after tax.
Pic credits Overdrive
IN pic KAWASAKI NINJA H2R
India is the world's second largest 2 wheeler market behind china selling 20 million 2 wheelers per annum. Now there are many motorcycle companies in India. But the Indian companies tend to focus on lower powered motorcycles which get the job done of transporting people from A to B. This is mainly because India's per capita income is not so great. But not all Indians are poor. In fact some of them are doing moderately well if not exceedingly well.
And in this group some have a interest to ride and explore, maybe on some good motorcycles. Maybe they can afford the mileage if it drops from 40 kmpl to 25 kmpl. But they certainly can't or won't afford a bike which costs 6 Lakhs INR instead of 3 Lakhs INR because of taxes.
The Indian government wants to protect the domestic companies. But if they are not manufacturing higher displacement motorcycles, then they certainly do not need protection from someone who is manufacturing and selling them.
What the government can do is make a law that if the imported bikes start selling beyond a certain number then it can be taxed to convince these companies that there is a good enough market and they should manufacture locally. But taxing each and every bike which comes in the CBU route with such a high percentage is not very bright. Maybe selling more foreign bikes with less taxes will even convince the Indian companies to make high end powerful yet refined products. This will make them invest into R&D and make the products export capable to Europe and USA.
Waiting for the day when a Bajaj/ TVS/Hero can manufacture this beauty below. Till then don't tax so much on foreign products. Taxing 5 bikes a year won't fill your coffers but it can make a Indian buyer who can just about manage the to buy the bike without tax, can never buy it after tax.
Pic credits Overdrive
IN pic KAWASAKI NINJA H2R
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