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GST on hybrid vehicles might see a reduction

May 29, 2017, 03:29 PM IST by Pratheek Kunder
GST on hybrid vehicles might see a reduction

The new GST taxation system has brought smiles to the faces of several car manufacturers, especially big sedans and SUV makers. But hybrid car makers are definitely unhappy due to the exorbitant tax rate of 43 per cent levied on hybrids. 

Apart from the 28 per cent GST, hybrid cars like the Toyota Prius and Honda Accord Hybrid will also attract 15 per cent additional cess, thus raising the overall taxation to 43 per cent. The current tax slab applicable on these cars is 30.3 per cent, which is considerably lower. Due to the high GST, many manufacturers would now want to stay away from launching hybrid cars, which will indirectly add to the growing air pollution. 

Some of the manufacturers have expressed concern to the GST council. Nitin Gadkari, Union Minister, understands this and will be talking to finance minister, Arun Jaitley, to reduce the tax slabs on environment friendly transportation like hybrid cars. Interestingly, the government retained the GST of all-electric cars at 12 per cent. Given that the tax increase is on hybrid cars only and there’s been no change in the tax slab for all electric cars, is this the government’s way to push electric cars only? Only time will tell us. 

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