Uttar Pradesh Clarifies Road Tax Waiver For Hybrid Vehicles Linked To FAME II

Updated: Thursday, July 18, 2024, 17:29 [IST]

The Uttar Pradesh state transport authority has notified car manufacturers that the road tax waiver for strong-hybrid vehicles will only apply to those qualifying for FAME II subsidies. However, dealer sources indicate that this change has not yet been implemented, and they are awaiting further clarifications from various stakeholders.

UP Hybrid Vehicle Policy: Coverage and Impact

The FAME II subsidy for four-wheelers extends to up to 55,000 electric and hybrid vehicles used commercially. Privately registered vehicles will not be eligible for the road tax waiver. Additionally, these benefits are only applicable to vehicles priced below Rs 20 lakh (ex-showroom). If the update is enforced, only specific hybrid variants of the Grand Vitara and Hyryder would qualify for the waiver.

This development follows concerns raised by some car brands with electric vehicles in their portfolios about the road tax waiver for hybrid vehicles. The updated policy is expected to offer incentives selectively to certain categories of strong hybrids rather than providing a blanket exemption. Final guidelines regarding incentives on hybrids and EVs will be announced soon, according to sources.

Dealers' Perspective on UP Hybrid Vehicle Policy

A few Toyota and Nexa dealers in UP have mentioned that the road tax waiver has not been withdrawn yet. However, private car buyers are being informed that they might not receive these benefits during registration if the new rules take effect. Currently, it remains an opportune moment for hybrid vehicle buyers in UP.

The UP Industries Department had previously announced on July 5 that it would waive road tax on hybrid and plug-in hybrid vehicles sold on or after July 1. Presently, a 5 percent tax is levied on EVs, 43 percent on hybrids, and 48 percent on petrol vehicles. This policy has reduced the on-road prices of models like the Hyryder and Hycross by up to Rs 3.11 lakh, lowering the premium paid for hybrids over petrol vehicles.

This policy update comes after some car brands with electric vehicle offerings expressed concerns about the road tax waiver's impact on hybrid vehicles. The revised policy is likely to provide selective incentives rather than a blanket exemption for all strong hybrids.

While private buyers may face limitations in benefiting from the road tax waiver under the new guidelines, commercial vehicle users stand to gain significantly from these subsidies. The final guidelines will clarify which categories of hybrids and EVs will receive incentives.