• By Divanshi Sharma
  • Wed, 20 Mar 2024 04:16 PM (IST)
  • Source:JND

Nitin Gadkari, the Minister of Road, Transport & Highways, has put forth a significant proposal regarding the tax levied on hybrid vehicles in India. Gadkari has advocated for a reduction in the Goods and Services Tax (GST) on hybrids from the current 48 per cent to 12 per cent, highlighting their substantial electric nature and reduced pollution footprint.

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Currently, electric vehicles in India are subject to a 5 per cent GST, whereas hybrids face a much higher tax rate of 48 per cent. Gadkari has raised concerns about this disparity, emphasising the environmental advantages of hybrids over conventional internal combustion engine vehicles.

The objective behind Gadkari's proposal is to encourage the adoption of hybrid and electric vehicles across the country. This will align with the government's broader goals of promoting sustainable mobility and reducing pollution levels. He has stressed the importance of discussing on this matter at the upcoming GST Council meeting, emphasising the potential benefits for the industry, reduced imports and environmental gains associated with a lower tax regime for hybrids.

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Gadkari recently unveiled a Toyota Innova equipped with a flex engine capable of running on both petrol and ethanol. The flex-fuel technology offers a cost-effective and eco-friendly alternative, reducing reliance on fossil fuels. If the proposal for GST reduction on hybrid vehicles is implemented, there is expected to be a surge in demand for strong hybrid cars such as the Maruti Grand Vitara, Toyota Hyryder, Toyota Innova HyCross, Honda City hybrid, and others. Moreover, increasing numbers of automakers are likely to consider introducing hybrid vehicles to the Indian market.