The Union Minister of Road Transport and Highways, Nitin Gadkari, recently shared an extremely important proposal. He has proposed that there should be a substantial reduction in the tax (GST) on hybrid vehicles. While speaking at News18’s Rising Bharat Summit 2024, Gadkari emphasized the need to slash the Goods and Services Tax (GST) on hybrid vehicles. According to him, the rates should be cut from the current 48 percent to just 12 percent.
Tax cuts for hybrid vehicles
Nitin Gadkari highlighted that although not as clean as electric vehicles, hybrid vehicles still provide environmental benefits. He added that hybrids are 60 percent electrically operated and emit minimal pollution compared to ICE vehicles. So, he believes that hybrids should not suffer because of a 48 percent tax.
Currently, electric vehicles in India enjoy a 5 percent GST. However, the significantly high tax rates of hybrids seem unfair. So, he proposes to lower the GST on hybrids. Gadkari aims to incentivize their adoption and contribute to a cleaner and greener future of India.
Nitin Gadkari requests Finance minister
It has been reported that Gadkari has also urged the Finance Minister to address this issue at the upcoming GST Council meeting. He has emphasized the potential positive impact on the automotive industry and the overall economy with this move.
The automotive sector is currently the highest GST contributor to the Indian government. It boasts a significant export market and thus reducing the tax on hybrids could stimulate growth. It will also decrease imports and help India in the global automotive landscape.
Nitin Gadkari’s plan for a greener future
Apart from being a big advocate for electric vehicles, the MoRTH minister has also emphasized the importance of Flex-fuel technology. He has stated that flex-fuel powered vehicles are also a very clean mode of transportation. Gadkari has been pushing automakers to make flex-fuel vehicles.
Currently, Nitin Gadkari owns a Toyota Innova equipped with a flex engine. He recently showed this vehicle on video as well. He stated that these engines can seamlessly switch between 100 percent petrol or ethanol fuel. The result of this technology is a cost-effective and environmentally friendly solution that reduces dependence on imported fossil fuels.
Hybrid cars outselling electric cars
As previously reported by us, despite having much higher taxes, hybrid vehicles have become more popular in India. They have been consistently outselling electric vehicles in the country.
It was reported that in August, September, and October of last year, strong hybrid vehicles recorded a total sales of 24,062 units. This was enough to surpass the 21,445 units of electric vehicles sold during the same period.
What’s even more interesting is that currently there are more electric cars than strong hybrids in India. At the moment, there are 16 EVs on sale in comparison to 4 strong hybrids.
In the June quarter of fiscal year 2023-24, electric cars dominated with 25,200 units sold, compared to 14,400 strong hybrid vehicles. However, the scenario changed in the September quarter when strong hybrids began to catch up, with 23,900 EVs sold and 22,000 strong hybrids.
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