The high-performance motorcycle market is picking up rapidly in India. However, the biggest gripe in this segment is the high import duties levied on the imported superbikes. Now, the government has finally decided to slash the customs duties to 50 percent. Up till now, motorcycle enthusiasts were shelling out 75 percent customs duties for 800 cc above motorcycle and 65 percent on below 800cc motorcycles.
The relief is not just provided on the bikes imported through CBU (completely built unit) route but also on models that are CKD (completely knocked down) assembled. In the case of CKD, the customs duties are slashed from 30 percent to 25 percent.
The Central Board of Excise and Customs (CBEC) stated that import duty on engine, gearbox, or transmission mechanism imported as a completely knocked down (CKD) kit in the pre-assembled form of motorcycles, not mounted on body assembly, has been slashed to 25 percent.
CBEC has tightened the grip on manufacturers that import engine or transmission in pre-assembled form also called CKU kits. The duties on these components has been raised to 15 percent from 10 percent. This shall promote local manufacturing of components. (BMW Motorrad recently announced their price list)
Although we know that around 25 percent relief is provided to companies that import superbikes via CBU route. However, we don’t know how much of this saving will be passed down to the buyers. Since this announcement came just two days ago, we will have to wait to know how superbike importers utilize this opportunity.
Companies that have many models imported via CBU route include- BMW Mottorad, Aprilia, Harley Davidson, Indian Motorcycles, Honda, Suzuki etc. Honda and Suzuki were slowly adding few CKD models but this announcement should affect their long-term plans.
Brands like Kawasaki and Triumph have very few CBU motorcycles, therefore we might not see significant changes in prices. Ducati is in a unique position because most of the Ducati bikes come via Thailand, and makes use of Free Trade Agreement (FTA) between the two countries. Some interesting times are here in the high-end motorcycle market. And if you planning to buy a new superbike soon, we suggest waiting for few months to see how companies react to this change.
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