High Tax of 48% on Hybrids to Stay, Low Tax of 5% on EV to Push Clean Tech

It's not good news for companies, such as Maruti Suzuki, Toyota and Honda. G20 Sherpa Amitabh Kant on Tuesday (03.09.2024) said that large duty deferential between electrics and hybrids should be maintained as the country should incentive zero-emission technologies to maintain the push towards green mobility.

Speaking at an event organised by Mercedes-Benz Research and Development India (MBRDI) here, Kant said govt will relentlessly push for adoption of clean mobility in the country through various policy measures. "We've had a policy framework where the tax on electric vehicles is 5% as compared to 48% on hybrids, which we intend to continue over a long period of time," he said.

Japanese companies have been lobbying hard to get GST rates down on hybrids from 48%, arguing that they are relatively clean against pure-petrol vehicles and thus should be incentivised. However, this suggestion is being opposed by others, companies such as Tata Motors and Mahindra & Mahindra, which argue that only zero-emission technologies should be incentivised and there should be no concessions for intermediate measures.

Kant said that the govt is pushing for battery manufacturing in a very big way. "Our policy is that we push for more and more electrification in mobility through all the policy levers available, including CAFE norms. So we will relentlessly push for India becoming a green mobility destination."

He said that if the country doesn't make the shift to cleaner technologies, it would miss out on the opportunity to become a leader in EV manufacturing.

He also said that following the tender for about 6,000 electric buses for seven cities, bigger tenders would roll out in the future. "The next tender we are doing is for 10,000 buses and the third tender would be for 50,000 buses. So, the size and scale would help in bringing down the prices of electric buses in a big way."