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Maruti Suzuki India (MSI) the country's largest automotive manufacturer is pitching for tax relief on hybrid and CNG vehicles. This is to promote the sales of hybrid and CNG vehicles besides the electric vehicles in the Indian market.
R C Bhargava, Chairman, Maruti Suzuki India, said there is a need for promoting hybrid and CNG cars as it will take time for electric vehicles to gain mass acceptance in the country. The current cost of owning electric vehicles in India are too high.
"Personally we would like to see GST benefits linked to greener/cleaner cars. The Government gave tax cut on EVs but hybrid should be given duty cut. There should be tax cut on CNG vehicles as well," he added.
Talking to PTI he further added, "For industrial development, reducing oil import costs is important. Hybrids and CNG will help. Government should look at both hybrids and CNG options before we transition to EVs."
Bhargava stated that hybrid cars are more efficient than petrol and diesel-powered cars by 25% to 30%. This will help in reducing the oil imports to the country. The GST tax for electric vehicles was reduced from 12% to 5% and the electric vehicle chargers from 18% to 5% effective August 1st this year.
However, there is no tax relief applied for CNG and hybrid vehicles. GST for hybrid and CNG vehicles are 28% plus cess which is same as other petrol and diesel vehicles. The Indian government has not announced any target for electric four-wheelers in the country. The sales for electric vehicles will depend on charging infrastructure range and cost. Even the FAME scheme did not offer any subsidy for private cars, he added.
Talking to PTI, Bhargava added further, "The cost of the EVs with the current technology will be very high. It could be more than double the price of internal combustion vehicles. This may not attract private car buyers...not the right time for mass acceptance for EVs."
Bhargava further stated The company is working on introducing small electric vehicles targeting fleet sales for cab providers like Ola and Uber. The company will continue to release more CNG vehicles to promote green initiatives. To promote "Make In India" government must promote factory fitted CNG vehicles. He later added "Last year, CNG saw an increase of 40 per cent in volumes. All small cars in our portfolio will get converted to CNG."
Bhargava clarified that the company will discontinue 1.3-litre diesel engine vehicles. He further added "But that doesn't mean we will discontinue Vitara Brezza. It will continue. We will introduce a petrol variant of Vitara Brezza before the end of 2019-20 fiscal. We are not phasing out the model."
Thoughts About The Tax Relief On Hybrid And CNG Vehicles
Maruti is on the right track here to pitch for tax relief to hybrid and CNG cars in India. This will encourage Indian motorist to move away from diesel and start looking at hybrid and CNG cars. With Indian government planning to achieve complete electrification by 2030, this would be an alternative strategy to encourage the green initiative.