Rajiv Bajaj Urges Govt to Cut GST on Clean Fuel Vehicles

Bajaj Auto Managing Director Rajiv Bajaj has urged the government to reassess GST rates on vehicles using clean fuels. At the launch of the Freedom 125 motorcycle, Bajaj expressed concerns about unsustainable subsidies for electric vehicles (EVs). He emphasised the need for a review similar to the 5% GST rate applied to EVs.

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Earlier, Bajaj and Union Minister Nitin Gadkari introduced the world's first CNG-powered bike, available in three variants starting at Rs 95,000 ex-showroom. Bajaj highlighted that in major two-wheeler markets like Latin America and ASEAN countries, GST equivalents range from 8-14%, with GDP per capita often higher than India's.

GST Rates and Market Comparisons

Bajaj questioned the logic behind India's 28% GST rate, noting that the common man in India can afford less compared to citizens in Thailand, Malaysia, Indonesia, and Brazil. He argued that lower GST rates would benefit consumers who are already financially constrained.

He also mentioned that despite efforts to keep the new motorcycle's price below Rs 1 lakh, the government should contribute by lowering GST. "How can sustainable technologies be promoted by unsustainable subsidies, not only in India but worldwide... we want freedom from all of this," he said.

Launch Event Highlights

At the unveiling event, Gadkari noted that India has recently become the third-largest automobile market globally, following the US and China. He stated that the automobile industry contributes around Rs 3 lakh crore in GST and employs about 4 crore people.

The minister suggested that Bajaj Auto should equip the vehicle with a 2-litre ethanol tank instead of a petrol tank alongside the CNG tank. He also urged the company to maintain the new motorcycles' price below Rs 1 lakh.

Freedom 125 Motorcycle Features

Bajaj Auto claimed that its Freedom CNG motorcycle offers about 50% cost savings by significantly reducing fuel expenses compared to similar petrol motorcycles. The CNG tank provides a range of over 200 kilometres on just 2 kilograms of CNG fuel.

The motorcycle also features a 2-litre petrol tank as a range extender, offering over 130 km of range if the CNG tank empties. This ensures an uninterrupted journey for riders.

Production and Export Plans

Bajaj Auto Ltd Executive Director Rakesh Sharma stated that the Freedom 125 will be manufactured at their Aurangabad facility. The initial production capacity is set at 10,000 vehicles per month, with plans to scale up to 30,000-40,000 by the fourth quarter of this fiscal year.

Sharma added that while the initial focus is on India, which is a significant market, they plan to export the bike within six months. Potential export markets include Egypt and Tanzania in Africa, Colombia and Peru in Latin America, and Bangladesh and Indonesia in Asia.

This initiative aligns with India's infrastructure projects aimed at building a CNG network to use cleaner fuels and save foreign exchange. "The Freedom 125 showcases Bajaj Auto Ltd's R&D and manufacturing prowess," Sharma said.

Bajaj termed the launch as a game-changer, stating, "Today, the message with the Freedom bike is Tiger Zinda Hai." The company believes this innovation will provide a cost-effective and environment-friendly alternative to traditional petrol motorcycles.