Shares of Bajaj Auto climbed 4.56% on Monday, August 18, closing at ₹8,588 after reports suggested that the government is preparing to rationalise the Goods and Services Tax (GST) framework ahead of Diwali. Under the proposed reform, the GST on two-wheelers could be reduced to 18% from the current 28–31% for larger engine models.
The “GST 2.0” proposal aims to simplify tax slabs by eliminating the 12% and 28% tiers, leaving just two rates: 5% for essentials and 18% for standard goods. If implemented, the move could significantly improve affordability of two-wheelers, particularly in rural and middle-income markets, ahead of the festive season.
The Society of Indian Automobile Manufacturers (SIAM) has consistently advocated for lower GST on two-wheelers, stressing that motorcycles and scooters are essential transportation and should not be taxed as luxury items. Bajaj Auto, one of India’s leading two-wheeler exporters, is expected to benefit both from improved domestic demand and stronger competitiveness in international markets.
Bajaj Auto’s strong rally on Monday pushed its market capitalisation to ₹2.40 lakh crore. Analysts and industry experts note that the anticipated GST cut could help revive two-wheeler sales, which have been under pressure in recent quarters.
