Arun Jaitley Hints At No Change Of GST Rate On Hybrid Cars

But now, the Finance Minister, Arun Jaitley has hinted that the government will not review the tax rate on hybrid vehicles. As the studies done by tax officers are not in sync with the industry demands.

As per the GST tax slab, the hybrid cars will be levied by a total tax of 43 percent, with 15 percent cess and 28 percent GST tax. Auto Industry states that the tax rate is very high for the eco-friendly vehicles.

Jaitley said, "We have done a detailed study on auto industry demand and a paper has been made which will be circulated among members. And, if necessary, it would come up for discussion. The fact that is being presented (by the industry), according to the paper, is not correct."

The automakers had demanded the GST Council to reduce the tax rate on hybrid vehicles to 18 percent. The auto industry stated that he fuel-efficient cars require scale and volume to become affordable for the customers.

Currently, the hybrid vehicles have levied a tax of 30.3 percent. And the GST Council has added the eco-friendly vehicles in the same category as petrol and diesel cars. So, the tax rate will increase to 43 percent.

The GST tax on hybrid cars is a significant setback to the eco-friendly vehicles. Earlier, the government had stated that the country would shift to electric vehicles by 2030. But with the current tax rates, it is unlikely to happen.