Gadkari urged the Finance Ministry to bring down the GST on hybrid cars to 12%. As reducing the GST on hybrid vehicles would not only promote eco-friendly transportation but also help in reducing pollution levels in the country. Currently, there is 28% GST levied on ICE vehicle including hybrids and with the inclusion of cess. The tax rate for certain vehicles exceeds 40%.
The move to lower the GST on hybrid vehicles aligns with the government's push towards promoting electric and hybrid vehicles as part of its efforts to combat climate change and reduce air pollution. The transport minister emphasised the importance of incentivizing the adoption of cleaner technologies in the automotive sector to achieve a greener and more sustainable future.
There is a tax on hybrid cars.
The finance ministry may not address the issue of tax concessions on hybrid vehicles in the upcoming GST council meeting as per ET NOW report. This will be beneficial for electric vehicle-focused Indian original equipment manufacturers (OEMs) such as Tata Motors, Mahindra and Mahindra.
Auto manufacturers such as Honda, Hyundai, Toyota, and Maruti Suzuki primarily concentrate on hybrid vehicles that operate using both petrol and electric motors. At present, the sales of their hybrid cars are on the rise; however, Gadkari suggested reducing the taxes on these vehicles from 28% to approximately 5%.
The finance minister does not support doing so, according to sources from ET NOW.
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