Governments the world over are doing everything they can to promote hybrid, electric and other forms of green technology in vehicles. The Indian government on the other hand has imposed a higher tax on these vehicles under the upcoming GST regime.
As per the new GST tax structure, cumulative duty on the hybrid cars has gone up to 43%, from the existing 30%, as per current tax laws.
Even electric cars, which Niti Aayog was so keen to see become a common sight in India (click here to read), will become more expensive in states like Chhattisgarh, Chandigarh, Madhya Pradesh and Rajasthan, since at the moment they do not attract VAT in these states. However, under the GST regime, they will now be taxed at 12%.
Hydrogen fuel-cell technology based vehicles will attract 43% duty (28% GST and 15% cess), same as large SUVs, which have ironically received a tax cut from 55% to 43% under the GST!
Speaking to the media, Shekar Viswanathan, Vice-Chairman, and Director, Toyota Kirloskar Motors, said, “It is short-sighted and stupid, and defies logic. This policy is anti-environment. Not encouraging hybrids is the same as not encouraging electrics as they share the same ecosystem.”
R. C. Bhargava, Chairman, Maruti Suzuki, said, “If GST on hybrids is the same as luxury cars, then hybrids will surely die out. There is an inadvertent ambiguity that is being created. It does not make sense.”
It remains to be seen if government considers giving a further tax brake or incentive to hybrid and electric car buyers in India, in a bid to promote these cleaner yet expensive technologies to less pollution.