Nitin Gadkari Says Hybrids Must Get Same Reduced GST Benefit As EVs

Before GST, hybrid vehicles were taxed 30.3 percent (12.5 percent excise duty, 12.5 percent value-added tax, 2 percent central sales tax and 1 percent national calamity contingent duty). Under GST, it attracts 28 percent tax and 15 percent cess like big petrol and diesel luxury cars.

It was in July this year that the GST Council decided to reduce the tax rate on electric vehicles (EVs) to 5 percent from 12 percent, a move aimed at accelerating the adoption of eco-friendly mobility solutions. The GST rate came into effect from August 1, 2019. However, hybrid cars and SUVs went from being taxed at 30.3 percent to 43 percent – an increase of 13.3 percent.

 Hybrid Vehicles
Hybrid Vehicles

Hybrids, now classified under the highest GST tax slab saw prices of cars skyrocket. However, Nitin Gadkari, Union Transport Minister, today said that hybrid vehicles must get the same reduced GST benefit as electric cars in the country. This means that hybrid cars will attract just 5 percent GST like electric vehicles and this will see a massive reduction in GST, 38 percent reduction, to be precise. In fact, he went on to state that the recommendation for this has already been made to the Finance Ministry and now the department is following up.

Mr. Gadkari said that “We have already reduced the GST on electric vehicles and now I am trying to make sure that the hybrid cars to get a similar reduction. I am following up with the Finance Ministry and so should the manufacturers so that it too can be covered under the same bracket.”

Hybrid Vehicles
Hybrid Vehicles

Nitin Gadkari, Union Transport Minister, today said that hybrid vehicles must get the same reduced GST benefit as electric cars

Before GST, hybrid vehicles were taxed 30.3 percent (12.5 percent excise duty, 12.5 percent value-added tax, 2 percent central sales tax and 1 percent national calamity contingent duty). Under GST, it attracts 28 percent tax and 15 percent cess – like big petrol and diesel luxury cars.

The recommendation to reduce GST on hybrid cars will be a welcome move for manufacturers like Volvo, BMW, Toyota, and even Maruti Suzuki, all of whom are looking to introduce hybrid vehicles into the market. This is also seen as other manufacturers changing their plans to include more hybrid vehicles in their portfolio.

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G NAGESWAR REDDY

Creative Blogger And Automobile Engineer.

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