Taking a note of high pollution levels in Delhi and making an effort to reduce it, the government has reduced the Value Added Tax (VAT) on hybrid cars, battery-operated vehicles and e-rickshaws from 12.5 per cent to 5 per cent. The reduction was one of the measures that was announced in the 2016-17 budget.
The Delhi government terms it as a step towards making the VAT rates the lowest in the country. “This step apart from promoting eco-friendly vehicles to reduce pollution in the city will also bring relief to a large number of entrepreneurs earning their livelihood by plying e-rickshaws. It is expected that a large number of consumers will shift from petrol or diesel vehicles to hybrid vehicles,” the official statement reads.
“It is expected that reduced rate of VAT will lead to better tax compliance. People should insist on taking bill having TIN number on each and every purchase and upload the bills through DVAT Bill App” the statement adds. Potential customers who have been hesitant to opt for hybrids or electric vehicles due to high VAT charges, might now consider opting for one owing to the new reduction.