Auto component manufacturers have urged the government to rectify the steep 43 percent tax levy on hybrid vehicles proposed under the GST and bring it at par with the 12 percent rate on pure electric vehicles.
Automotive Component Manufacturers Association of India President Rattan Kapur described the 43 percent tax on hybrid vehicles as "penal", observing that ushering of new technologies should not be so disruptive that the entire industry is wiped out.
"We should encourage the hybrid technologies to coexist with the pure electric as it allows the conventional technologies to evolve with the new," he said while addressing an Automotive Conclave organised by industry body CII.
Kapur said the automotive industry is concerned as the GST rate on hybrid vehicles at 43 percent is almost penal compared to the benign 12 percent of electric vehicles. "We would like to believe that the high rate on the hybrids is merely a matter of oversight and would be rectified to make it at par with that of the electric vehicles. I strongly urge the government through Girish Shankar Secretary Department of Heavy Industry to kindly take it up with the concerned authorities," he said.
Under the Goods and Services Tax (GST), the tax incidence on hybrid vehicles will go up to 43 percent from the current level of an effective tax rate of 30.3 percent. In comparison, pure electric vehicles will attract 12 per cent tax under the GST.
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