Hybrid vehicles will draw 15% cess along with 28% GST; could jeopardize Indian government’s drive for eco-friendly transportation
India is about to see the implementation of the new tax system GST (Goods and Services Tax). Due to the new tax system, smaller cars will become more expensive, while the large SUVs and crossovers will become less expensive. This could affect the mass market car producers. Meanwhile, the hybrid vehicles are also expected to be affected with higher pricing due to the new tax system.
The hybrid vehicles will be slapped with 15% cess over and above the 28% GST, while the electric vehicles will draw only 12% cess. This means the hybrid vehicles will be more expensive than the electric vehicles. In the Indian market, only a few electric vehicles are on sale compared to the hybrid models. Several automakers like Maruti Suzuki, Toyota, Honda and Volvo sell hybrid cars in the domestic market.
Also read: 2017 Toyota Camry Hybrid Launched in India at Rs. 31.98 Lakh
Speaking about the new tax system, hybrid car manufacturers believe that it is unfriendly for the growth of eco-friendly hybrid vehicles. As the Indian government is promoting environment friendly mobility options, the new tax structure could jeopardize the drive severely as the hybrid vehicles have been clubbed with luxury cars in GST.
As the new tax structure has been announced, the large cares with 1,500 cc and bigger engines will draw 15% cess along with 28% GST. Also, SUVs with length of 4 meter or more and with engine of 1,500 cc and bigger will draw the same tax rate. Currently hybrid cars are taxed at a rate of 12.5% and the GST increases it by 2.5%.
Also read: Honda Accord Hybrid Launched – All You Need to Know
Speaking about the new tax rates, Toyota Kirloskar Motor vice chairman Shekar Viswanathan has said that considering the hybrid vehicles, GST brings environment unfriendly and regressive tax rate. Numbers of hybrid cars have been increasing slowly but steadily in the country and the higher tax rate could slow that down.
Toyota Camry Hybrid Gallery
Honda Accord Hybrid Gallery
