When the new GST Tax regime come into play from July 1st, Hybrid and Mild-Hybrid cars sold in India are set to expensive. The increase in prices of such vehicles can range from INR 1.5 lakh, going all the way up to INR 45 lakh. Kept in the same cess bracket as that of the luxury cars, Hybrid vehicles will attract up to 43 percent tax on them. This is the standard 28 percent GST along with 15 percent additional cess. Currently, the cumulative tax imposed on them is 30 percent. Companies say that they are left with no choice but to pass on this to the end consumer. So is you are planning to buy a Hybrid or a Mild-Hybrid car, then it would be advisable that to go for one before the GST regime comes into effect. Also Read: GST effect: Discounts up to INR 25,000 to INR 2.5 lakh on Maruti Suzuki Swift, Ford EcoSport, Hyundai Elite i20, Santa Fe, VW Polo & others
Currently, only a handful of full Hybrid cars are available for sale in India. These includes the likes of the Toyota Camry, Honda Accord and the BMW i8 sportscar. Mild-Hybrids available in India includes the likes of the Maruti Suzuki Ciaz and the Maruti Suzuki Ertiga along with the Mahindra Scorpio and XUV500. The implementation of government’s FAME scheme along with the low tax regime promoted the sales of these cars in India. However, with GST, things could go down the line. Also Read: GST effect on cars: Maruti Suzuki S-Cross gets discount of INR 70,000; New S-Cross India launch by October 2017
Electric cars however have been strapped with a 12 percent cess, over the 28 percent standard, taking the cumulative to 40 percent. This has been done in order to increase their sales under the GST regime.
That said, full-fledged electric cars are still less effective in a country like our where the infrastructure to support them still does not exist. Hybrid cars on the other hand, could help India reach the point where we can smoothly shift on to pure electric cars, while keeping the pollution as well as fuel consumption levels low. Also Read: GST Impact on bikes: Discounts on UM Renegade Commando, Sport S; Get price cut up to INR 5684
Automakers like Toyota Kirloskar Motors, Maruti Suzuki and Mahindra & Mahindra have expressed their concerns and disappointment over the high tax implementation on Hybrid cars under the soon to be implimented GST regime.