Government reduces import duties on CBUs

Words by Ganesh Murthy N

Always wanted to buy a litre class or a middle weight motorcycle but the high customs and import duties have put them out of reach? Fret not; the Government has addressed your concerns now making big bike brands more affordable to the customer.

As per the notice to the Customs department from the Ministry of Finance, the import duties for Earlier, for Completely Built Units (CBU) below 800cc the import duties attracted 60 per cent while those above 800cc attracted 75 per cent. Now, the import duties of the aforementioned motorcycles have come down to 50 per cent, giving a shot in the arm for CBUs.

The import duties for pre-assembled Completely Knocked Down units (CKD) earlier stood at 30 per cent; after the revision, the import duties for pre-assembled CKD parts like engine gearbox and transmission mechanism but not mounted on the body assembly is now 25 per cent, down by 5 per cent.

With regard to customs duty of the CKD components like engine, gearbox and transmission mechanism not in pre-assembled condition, the import duty is now 15 per cent, up by 5 per cent.

This move will affect many bike makers that have both. The Ducati 1299 Panigale R Final Edition, Monster 1200, and Monster 1200 S will become affordable as they are CBUs.  Similarly CBUs like Yamaha YZF-R1 and MT-09 will become less costly.

On the reduction of import duties, Pankaj Dubey, MD & Country Head, Polaris India said, “We had been advocating the reduction of import duties for quite some now and we are glad that the Government has paid heed to our demands and rationalised the import duty structure to 50 per cent across the range for imported bikes. This will enable more Indian customers to enjoy the quality and refinement provided by these high-end bikes. We are confident that this will lead to not only growth in sales of luxury bikes in the country but also indirectly lead to retail space off take and jobs creation at expanding dealerships. I see this opening up Auto component industry for global sourcing thus facilitating a boost to Make in India campaign of the Government.”

Vimal Sumbly, managing director of Triumph Motorcycles India said, “After the budget, this is a great initiative to cut import duties on CBUs, but for CKDs where local assembly is done in India, the import duties are increased by 5 per cent and the FTA remains unchanged. We would urge the government to relook into this area.”