New Delhi, Sept. 7 -- Two-wheeler sales volume is expected to grow by 5-6 per cent in the current fiscal year, due to the Goods and Services Tax (GST) Council's decision to rationalise tax rates, Crisil Ratings said in a report.

The rating firm said that the move is expected to provide a much-needed stimulus to the domestic automobile industry, particularly two-wheelers and passenger vehicles (PVs), which together account for nearly 90 per cent of the market's volume.

The reduction in GST rates is forecast to drive a 200 basis points (bps) upshift in two-wheeler demand and a 100 bps increase for PVs, the report added.

Sales in the two-wheeler segment had suffered in the first quarter of this fiscal, especially in the entry-level commut...