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Hybrid Vehicles To Be Pricier — Is The Government Backtracking On Its Green Policy?
The hybrid vehicles in India will cost more after the implementation of GST taxation policy. The hybrid vehicles are levied the highest tax of 43 percent.
The Indian government is all set to implement the new taxation policy, the Goods and Service Tax (GST). We have already told you the impact of GST on the automobile industry.
Now the growth of hybrid vehicles in the country has suffered a major setback. The government has levied the highest tax on the hybrid vehicles. The development has impacted several automakers who invested in this technology.
Under the new GST taxation policy, hybrid vehicles will attract total levies of 43 percent. More than the smaller petrol cars and also the diesel vehicles. A 12 percent tax has been levied on the pure electric vehicles under GST.
The decision to increase the tax for hybrid vehicles is a surprise for the manufacturers. Especially, the companies investing in the technology to address the increasing pollution. But the electric vehicles should see a growth in India.
President of SIAM, Vinod Dasari said, "Government has always encouraged environmentally friendly technologies and with the current focus on reducing emissions of greenhouse gases and reducing carbon footprint one would have expected the lower taxation to continue on such vehicles in a technology agnostic manner."
The hybrid vehicles are the highest taxed products under GST at 28 percent tax and 15 percent cess. If the government does not offer separate subsidy on hybrid vehicles, the sales of such vehicles will certainly go down.
Several automakers such as Maruti Suzuki, Hyundai, Mahindra and Mahindra and Toyota had planned to launch the fully hybrid cars in the next 3 to 4 years. But the new taxation policy has upset the plans of the manufacturers.
Vice-Chairman, Toyota Kirloskar Motor (TKM), Shekhar Vishwanathan said, "The government is talking about encouraging electric mobility, and hybrid vehicles form a part of that ecosystem. Raising levies on hybrids under GST is a retrograde step."
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