Levy 12 per cent tax on hybrids at par with electric vehicles: Auto component makers_Levy 12 per cent tax on hybrids at par with electric vehicles: Auto component makers

Levy 12 per cent tax on hybrids at par with electric vehicles: Auto component makers

May 21, 2024

NEW DELHI: Auto component manufacturers today urged the government to revise the 43% tax levied on hybrid cars under GST to be equivalent to the 12% tax levied on pure electric cars.

Ratan Kapur, President, Automotive Component Manufacturers Association of India (ACMAI), described the 43% tax on hybrid cars as “punitive” and argued that the introduction of new technology should not be so disruptive as to destroy the entire industry.

“Hybrid technology should be encouraged to coexist with pure electric technology as it allows traditional and new technologies to evolve together,” he said in a speech to the industry organization using the CII at the organization’s Automotive Secrets conference.

Kapoor said the auto industry is worried about the high Goods and Services Tax (GST) of 43% on hybrid cars. This is almost fine compared to the 12% tax rate on electric cars.

“We want to believe that the high tax rate on hybrid vehicles is just a regulatory issue that can be adjusted to equalize with electric vehicles. I strongly urge the government to address this issue through Girish Shankar, the minister for heavy industry. “About the authorities,” he said.

Under the Goods and Services Tax (GST), the tax attribution on hybrid cars will start from the current 30.3% Effective tax rate will be increased to 43%.

In comparison, the GST tax rate for pure electric vehicles is 12%.

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