The rise of the two-wheeler segment in India along with the allied helmet industry has been a growth story in itself. The increase in the purchasing power of both the urban and semi-urban markets and to add to that, the low cost of ownership of two-wheelers have been the major growth drivers for these segments.
The two-wheelers are also looked upon as income enablers. As the second highest populated country in the world, India comprises of a lot of middle and lower class segment. With transportation still being a challenge in India, a lot of people in these segments turn towards two-wheeler. This industry includes various vehicles like Motorbikes, scooters, and mopeds, which come in a varied range from affordable to classy bikes.
Additionally with the COVID-19 and social distancing becoming new normal, people have shifted back to their personal mode of transportation rather than using public transportation.
So two wheeler also being the most convenient way to ride in India, has also lead to increase in sales and demand for helmets.
With so many two-wheelers plying on the Indian roads in tier I, II and III cities it also points towards the safety measures and precautions needed for the riders. As on an average there are 500,000 road accidents on Indian road deaths per annum and more than 30% involve two-wheeler riders.
With such alarming number of road accidents helmets are important for road safety. They are life-saving device and a necessity product, whether riding or sitting on the back. This has even led to a growing emphasis on helmet legislation by many state governments in India.
But it also makes sense for the government to ponder over the riders who need quality helmets at reasonable prices to ride and stay safe.
Unless helmets are exempted from taxes, prices will soar high and governments intention and effort to help boost adoption of quality helmets will be lost.
Furthermore, in a price sensitive country where people consider helmets a financial burden, a 12 percent GST instead of 18 per cent will help to draw people towards good quality helmets and will induce them to buy and understand its significance.
Every day approximately 13 people lose their lives in road accidents. Many of these deaths happen because of no or poor quality of helmets. So for the good of our country, lower GST rates shall be levied on helmets as they are meant for safety and we have seen many incidents where a helmet saved a family from being orphaned. Helmets are life saving device just like medicines. Therefore, just the way there is no GST on medicines so shall helmets be exempted.
Since helmets are directly associated with safety, it is of utmost importance that this matter is given importance at the earliest. Helmets must not be compared to other commodities. The purpose they serve is far superior to other things and must not come under any GST policy as helmets are products that have been negatively impacted.
It is not only about saving the helmet industry from sinking low but also ensuring the safety of people without burning a hole in their pocket.
Moreover reduction of GST on helmets will push the sales graph of the quality helmets to a new high; this will further help do away with the unorganized market as manufacturing of fake helmets has already been made a criminal offence.
Therefore, GST rate on the same should be brought down to 12 percent instead of 18 percent.
The benefits of it will be far reaching. It will eventually help bring down the road safety expenses spent by the Government to 1.5% of the budget which currently is about 3% including ambulance, insurance, police, traffic police, hospitals and doctors. This will definitely be a huge saving for the Government.
*by Rajeev Kapur, Managing Director, Steelbird Helmets
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