The replacement bill brought by the government yesterday has increased excise duty on two-wheelers. The replacement bill has increased excise duty on motorcycles and scooters above 125cc by 10 percent. With the increase in the excise duty, the prices of the highest-selling sub-500cc segment will go up.

Earlier, 40 percent excise duty was levied on motorcycles and scooters up to 250cc, but now the classification of motorcycles has been changed. Accordingly, 40 percent excise duty will be levied on 125cc motorcycles, 50 percent on 125 to 200cc motorcycles and 60 percent on 200 to 250cc motorcycles. Similarly, excise duty on 500 to 800 cc motorcycles has been increased by 20 percent. Earlier, the excise duty on motorcycles between 500 and 800cc was 80 percent. Now, 100 percent excise duty will be levied on this segment. Similarly, above 800cc, the excise rate remains the same as earlier i.e. 100 percent.

The road construction fee which is adjusted in the final pricing of the motorcycle has also been increased by the replacement bill. Earlier, the road construction fee was Rs 15,000 for motorcycles and scooters up to 155cc, Rs 18,000 for motorcycles up to 155-250 cc, Rs 50,000 for motorcycles up to 250-400 cc and Rs 100,000 for motorcycles above 400cc. According to the new arrangement, the road construction fee will be Rs 15,000 for motorcycles and scooters up to 125cc, Rs 18,000 for motorcycles up to 125-250 cc, Rs 50,000 for motorcycles up to 250-400 cc and Rs 100,000 for motorcycles up to 400cc.

Similarly, the government has decided to give a 50 percent excise duty exemption on two-wheeler, four-wheeler and assembly kits imported by companies to be assembled in Nepal through the bill. According to this decision, the price of vehicles assembled in the country will decrease in some models.  Currently, Bajaj and TVS are assembling motorcycles in Nepal, while brands like Yamaha, Honda and Suzuki are looking to set up assembling plants.

The Sher Bahadur Deuba-led cabinet unveiled a new budget for the fiscal year 2021/22, revising and downsizing the ordinance budget brought by the former PM KP Shama Oli-led government through a replacement bill, yesterday.