Union Minister Nitin Gadkari said that he will insist Finance Minister Arun Jaitley to let the GST rate down on hybrid vehicles and other automobiles that are alternate options of fuels.
The GST rates announced last week the eco-friendly hybrid cars are slated to attract a 15% cess over and above peak rate of 28% which is same rate levy on large luxury cars and SUVs.
The automobile industry expressed concern on the high rate on hybrids stating that it would affect the government plan to promote green vehicles.
Currently hybrid vehicles attract 12.5% excise duty and the effective overall tax rate of 30.3%.
Road Transport and Highways Minister Nitin Gadkari said, “ I will be meeting Arun Jaitley soon to request that tax slabs for vehicles run on ethanol, bio diesel, bio CNG should be reduced. I will also request him to reduce tax rate on hybrid vehicles in order to tackle air pollution in the long run.”
The minister who holds Shipping portfolio said the government’s policy is to promote electric mobility in the country. GST has kelp rate of 12% on electric vehicles.
He said, “It is our policy to encourage electric cars and buses. Shortly, I will be coming out a policy regarding this. Hybrid cars should also be encouraged, it saves fuel.”
We should encourage electric and hybrid vehicles with alternate fuels to reduce India’s import of crude oil.
Gadkari said, “We import crude worth Rs 7 lakh crore. Electric, ethanol, bio diesel, bio CNG these are import substitutes and are cost effective, pollution free and indigenous too.”
He further added that the cost will be come down, if these vehicles are encouraged on a large scale.
Auto industry has also plan to raise the matter of higher tax rate on hybrid vehicles with the Finance Ministry.
Some popular hybrid vehicles which were sold in India are Honda Accord and Camry Hybrid and Prius from Toyota. Price of these cars is between Rs 31.98 lakh and Rs 38.96 lakh.