The Government of India has implemented the Goods And Service Tax (GST) from July 1, 2017. The new tax regime has adversely impacted the eco-friendly vehicle due to high tax rates.
But India's leading automaker, Maruti Suzuki has stated that it will continue to sell its vehicles equipped with mild hybrid technology.
Currently, Maruti Suzuki offers Ciaz sedan and Ertiga MPV with the mild hybrid technology. Due to GST, the prices of these models have gone up by over Rs 1 lakh.
Under GST, the hybrid vehicles come under the same tax slab as luxury cars. A 28 percent tax and 15 percent cess is levied on the eco-friendly vehicles. The total tax rate stands at 43 percent, which is higher than the previous tax rate of 30.3 percent.
Managing Director and CEO of Maruti Suzuki India, Kenichi Ayukawa said, "When we decided to implement hybridisation, it was done with an aim of making vehicles environment friendly and improve efficiency, not only in India but also globally. That position remains unchanged."
Maruti Suzuki is hoping that the government might reconsider the tax rates on hybrid vehicles. It does not make sense to consider hybrid vehicles in the same category as the conventional vehicles.