Imported luxury motorcycles of high-end brands, including Harley-Davidson Inc. and Triumph Motorcycles UK, are set to get cheaper as the government slashed customs duty to 50%.
Earlier, import of motorcycles with engine capacity of 800cc or less used to attract 60% duty, while those with capacity of 800cc or more attracted 75% duty.
The Central Board of Excise and Customs (CBEC), through a notification on 12 February, has slashed the duty on both these variants of motorcycles imported as completely build units (CBU) to 50%.
Experts said the import duty rates have been rationalized for these motorcycles as it has been an industry demand for long and such high-end bikes are not manufactured in India at present.
“The government has reduced the basic customs duty rate to 50% on import of completely built motorcycles. The reduced rates should abet price reduction of motorbikes which are imported in a finished state for sale in India,” EY partner Abhishek Jain said.
According to the CBEC notification, import duty on engine, gearbox, or transmission mechanism as a completely knocked down (CKD) kit in pre-assembled form of motorcycles, not mounted on a body assembly, has been reduced to 25%. These pre-assembled parts attracted customs duty of 30% earlier.
Meanwhile, to promote local assembling as part of ‘Make in India’ initiative, the CBEC has hiked customs duty to 15% on import of engine, gear box and transmission mechanism as a CKU kit which are not pre-assembled. The duty on these was 10% earlier.
“By increasing customs duty on engine, gearbox and transmission mechanisms, government is sending out a loud message that it will protect automobile ancillary industry. This policy would encourage global auto ancillary industry to have a preference for India as a manufacturing base for global supply,” Deloitte India senior director Anoop Kalavath said. (MINT)
