JOIN USUnion Road Transport and Highways Minister Nitin Gadkari on Thursday said that he will urge Finance Minister Arun Jaitley to bring down the GST rate on hybrid vehicles and other automobiles that run on alternate fuels.
Under the GST rates announced last week, hybrid cars, which are considered eco-friendly, are slated to attract a 15% cess over and above peak rate of 28%, same as those of large luxury cars and sports utility vehicles (SUVs).
The automobile industry has expressed concern on the high rate on hybrids stating it would put a spanner in the wheels of government plans to promote green vehicles. At present hybrid vehicles attracts excise duty of 12.5% with an effective overall tax rate of 30.3%.
“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,” Gadkari said.
Karnataka writes to FM
Ministers at the Centre are not the only ones seeking relief. Karnataka Minister for Large and Medium Industries R V Deshpande also wrote a letter to Jaitley, urging the latter to relook the GST on hybrid cars.
“You may be aware that both hybrid vehicles (HVs) and electric vehicles come from the same family of alternative fuel vehicles... I would request the Government of India to examine this issue and to keep the proposed GST for HVs same as EVs i.e. 12% as this measure would definitely promote HVs in the same way as EVs and also would be an enabler to the government’s target of enhancing electric mobility in India,” Deshpande wrote.