Union Minister for Road Transport and Highways, Nitin Gadkari, previously proposed a significant tax reduction on hybrid vehicles, which could have benefited popular models like the Toyota Innova HyCross. He suggested reducing the current 48% GST on hybrid vehicles to 12%, potentially leading to substantial cost savings for buyers.

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However, there’s a big update. The Finance Ministry, chaired by Nirmala Sitharaman, is not expected to discuss granting tax concessions to hybrid cars in the upcoming GST council meeting. Currently, hybrid and ICE vehicles face a 28% GST, with an additional CESS of 15% for hybrids above the 1200cc petrol and 1500cc engines, while there is no CESS on hybrids below these engine capacities.

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๐ŸŒฑ Gadkari’s Proposal for Eco-Friendly Transport

  • Environmental Benefits: Gadkari argues that lowering GST on hybrid vehicles would promote eco-friendly transportation and help reduce pollution levels in the country. This proposed tax reduction aligns with the government’s efforts to promote electric and hybrid vehicles to combat climate change and air pollution.

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  • Incentivizing Cleaner Technologies: Emphasizing the need for cleaner technologies in the automotive sector, Gadkari highlighted the importance of incentivizing hybrid and electric vehicles for a greener and more sustainable future.

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๐Ÿš˜ Impact on Carmakers and Market Trends

  • Hybrid Vehicle Focus: Carmakers such as Honda, Toyota, and Maruti Suzuki, which focus primarily on hybrid vehicles along with petrol options, are soon to introduce electric vehicles.

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  • Rising Sales: The sales of hybrid vehicles are on the rise, with more models expected from Maruti Suzuki and Toyota in the coming months.

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  • Potential for Future GST Reduction: Despite the Finance Ministry’s current stance, there is still a possibility that we may see a reduction in the GST percentage on hybrid vehicles in the future.

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๐Ÿ”„ Current Tax Structure for Hybrid Vehicles

  • GST and CESS: Hybrid and ICE vehicles currently face a 28% GST, with an additional CESS of 15% for hybrids above the 1200cc petrol and 1500cc engine capacities. There is no CESS on hybrids below these engine capacities.

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Stay tuned for more updates on the latest developments in the automotive industry and potential changes in tax policies affecting hybrid and electric vehicles.

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