48% GST on Hybrid Cars, 5% on EVs to Stay: Amitabh Kant

In a recent announcement, Amitabh Kant, G20 Sherpa, confirmed that the Goods and Services Tax (GST) rates for hybrid and electric vehicles (EVs) in India will remain unchanged. Speaking at an event organized by Mercedes-Benz Research and Development India (MBRDI), Kant emphasized that the current GST rate of 48% on hybrid vehicles and 5% on EVs will continue to incentivize the adoption of zero-emission technologies.

Kant explained that the significant tax differential between electric and hybrid vehicles is intentional, and aimed at promoting the transition towards greener mobility solutions. The government's focus is on encouraging the adoption of clean technologies and reducing the carbon footprint of transportation.

The decision follows considerable debate and lobbying from various automotive companies. Japanese manufacturers, such as Toyota and Honda, have argued for a reduction in the GST rate on hybrids, suggesting that these vehicles, which combine electric and petrol engines, are a cleaner alternative to conventional petrol vehicles and deserve financial incentives. However, this viewpoint is contested by companies like Tata Motors and Mahindra & Mahindra, which advocate for exclusive incentives for zero-emission technologies rather than intermediate solutions.

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Kant also highlighted the government's commitment to advancing battery manufacturing and green mobility infrastructure. He revealed plans for substantial electric bus tenders, including a forthcoming bid for 10,000 buses and a subsequent one for 50,000 buses. This strategy is expected to significantly reduce the cost of electric buses and support the broader goal of establishing India as a leading player in EV manufacturing.

Source: TOI