KEY HIGHLIGHTS
- Finance Minister has declined the proposal to reduce taxes for hybrid cars
- Electric vehicles (EVs) taxed at 5 per cent
- A 5 per cent reduction is also not supported.
- Govt appears to be prioritizing the promotion of electric vehicle (EV) adoption
The Finance Minister of India, Nirmala Sitharaman, has indicated a reluctance to discuss tax concessions for hybrid cars in the upcoming GST council meeting. This decision is likely to favour Indian automobile giants such as Tata Motors and Mahindra, while companies like Maruti Suzuki, Honda, Toyota, and Hyundai, which have hybrid models in their portfolios, may feel disappointed as they were hoping for a reduction in taxes. Let's delve into the details below to understand the situation better. Also, join our 91Wheels WhatsApp Group community of petrolheads to never miss out on any updates from the automotive world.
Also Read: Maruti Suzuki Jimny Heritage Edition Launched, But...
Finance Minister Disagrees With Tax Reduction Proposal For Hybrid Cars
Nitin Gadkari, India's Minister of Road Transport and Highways, had previously announced plans to propose a significant drop in taxes on hybrid vehicles from 45 per cent to 12 per cent during the upcoming GST council meeting. This move raised hopes for customers that hybrid cars would become more affordable in the future. However, recent developments indicate that the Finance Minister has expressed disagreement with this proposal. Consequently, the optimism sparked by Gadkari's statement about the potential affordability of hybrid vehicles has been dampened.
Also Read: Force Gurkha 5 Door Now Reaching Dealerships: Check Images Here
Govt To Prioritize The Promotion Of EVs, No Current Incentives For Hybrids
Hybrid cars offer an eco-friendly option by combining an internal combustion engine with electric motors powered by batteries. As the market for hybrid cars grows, they are becoming an increasingly popular choice for environmentally conscious consumers. These vehicles produce fewer emissions than traditional cars, making them a good solution for the environment.
Currently, electric vehicles are taxed at 5%, while strong hybrid cars and internal combustion engine (ICE) cars longer than 4 meters with a 1.5-liter engine are taxed at 43%. ICE cars with engines larger than 1.5 litres are subject to a 48% tax. The tax rates for hybrid and ICE cars vary depending on factors such as type, size, and engine capacity.
Despite a previous proposal for a significant 28% reduction in taxes being declined, Nitin Gadkari suggested a more modest 5% reduction. However, this proposal was also not supported by the finance minister. It appears that the government is shifting its focus towards promoting electric vehicle (EV) adoption in the country. However, there seems to be no significant push from the government for the hybrid market at the moment.
In India, there are several hybrid cars available, such as the Maruti Suzuki Grand Vitara, Toyota Innova Crysta, Vellfire, Urban Cruiser, Camry, Volvo XC90, Honda City eHEV, and more.
Also Read: Mahindra BE 05 EV Interior Spotted - Check Out Details And Pictures Here
Verdict
This decision could potentially disappoint both the manufacturer and the customers interested in this particular model. However, there remains a glimmer of hope that the government might have alternative plans in store. It would have been beneficial if the government had also introduced some incentives for hybrid vehicles. This could have provided a positive outlook for the situation.
