FILE PHOTO: The logo of Mahindra and Mahindra is seen at a showroom in Mumbai, India.
Credit: Reuters
New Delhi: The reduced tax margins between electric vehicles and diesel/petrol run vehicles due to the goods and services tax (GST) rate rationalisation is unlikely to take out focus from the transition to cleaner energy, a senior Nalinikanth Gollagunta, Chief Executive Officer – Automotive Division, Mahindra & Mahindra, said on Monday.
He said Mahindra & Mahindra has outlined plans to increase electric vehicles manufacturing to around 30% by 2030 from the current around 5% and there is no change in the company’s strategy due to GST rate changes.
The government has reduced GST on internal-combustion engine vehicles effective from September 22. GST on small cars up to 4 metres in length has been cut to 18% from earlier rate of 28% plus surcharge while on bigger vehicles it has been lowered to a flat rate of 40% from earlier effective rate ranging from 43%-50% (including cess). GST on electric vehicles has remained unchanged at 5%. This has resulted in a significant drop in tax incentives on the cleaner fuel vehicles.
Addressing a media roundtable in Mumbai, Gollagunta said GST rate rationalisation has boosted sales across all vehicles categories.
While, most of the manufactures passed on the benefits of the GST rate cut on vehicles to consumers effective from September 22, Mahindra & Mahindra cut the prices proactively with effect from September 6.
Mahindra & Mahindra on Monday launched new variants of its Bolero model with starting price of Rs 7.99 lakh (ex-showroom). The new price is lower than the downward revised price of Rs 8.79 lakh, which was announced last month following the GST rate rationalisation announcement.
Following the GST rate rationalisation Mahindra & Mahindra had announced upto Rs 1.27 lakh reduction in its Bolero/Neo model. GST on these models has been reduced from 31% to 18%.
Gollagunta said prices of Bolero models have been cut further due to innovation in technology and the impact of GST rate rationalisation. Price of the Bolero N10 model, which currently stands at Rs 10.29 lakh, will be revised downward to Rs 9.79 lakh.
“All Bolero variants, including the newly introduced N11, will now be priced under Rs 10 lakh,” Gollagunta said. Mahindra & Mahindra first launched the Bolero model in 2000. Gollagunta claimed that the company cumulatively sold over 16 lakh Bolero vehicles in the past 25 years.