Import duty cut to lower high-end bike prices

Imported motorcycles from high-end brands, including Harley Davidson and Triumph, are set to get cheaper as the government slashed the Customs duty to 50 percent. Earlier, import of motorcycles with engine capacity of 800 cc or less used to attract 60 percent duty, while those with capacity of 800 cc or more attracted 75 percent duty.

Imported motorcycles from high-end brands, including Harley Davidson and Triumph, are set to get cheaper as the government has cut customs duty to 50 per cent.

Earlier, import of motorcycles with engine capacity of 800cc or less used to attract 60 per cent duty, while those with capacity of 800cc or more attracted 75 per cent duty.

The Central Board of Excise and Customs (CBEC), through a notification on February 12, slashed the duty on both these variants of motorcycles imported as completely built units (CBUs) to 50 per cent.

Experts said the import duty rates had been rationalised for these motorcycles as it had been an industry demand for long and such high-end bikes were not manufactured in India at present.

“The government has reduced the basic customs duty rate to 50 per cent on the 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, the import duty on the 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 per cent.

These pre-assembled parts attracted customs duty of 30 per cent earlier.

Meanwhile, to promote local assembling as part of the Make in India initiative, the CBEC has hiked customs duty to 15 per cent on the import of engine, gearbox and transmission mechanism as a

CKD kit which is not pre-assembled.

The duty on these was 10 per cent earlier.

“By increasing customs duty on the engine, gearbox and transmission mechanisms, the government is sending out a loud message that it will protect the automobile ancillary industry. This policy will encourage the global auto ancillary industry to have a preference for India as a manufacturing base for global supply,” Deloitte India Senior Director Anoop Kalavath said.