Maruti Suzuki Ciaz, Ertiga, Toyota Camry, Prius & Honda Accord Hybrids Might Become Cheaper

The government has asked GST council to scrap the additional 15 percent cess that is levied on hybrid cars.

The Government Of India is considering to scrap the additional 15 percent cess that is levied on hybrid cars in India. The government is planning to request the GST Council to stop levying the extra cess hybrid cars. Post the implementation of GST, hybrid cars attract a total tax of 43 percent (28 percent tax, plus 15 percent cess). According to reports, the move comes after intense lobbying by Indian, European and Japanese car manufacturers who are planning to introduce hybrid vehicles in India. Also Read: GST effect on cars & MPVs: Maruti Suzuki Ertiga, Ciaz SHVS hybrids become expensive by INR 1.5 lakh

If the government successfully scraps the additional 15 percent cess, then hybrid cars like Maruti Suzuki Ciaz, Ertiga, Honda Accord, Toyota Camry and Prius, BMW i8 and the Volvo XC90 Plug-in Hybrid will benefit from this move. Post GST, prices of these cars have increased by 12.5 percent as the pre-GST effective tax was 30.5 percent. Hybrid cars, as the name suggests, come equipped with a petrol engine coupled to an electric motor. The Government of India, under its FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) scheme, encouraged the manufacturing and sell of hybrid cars in India. Read More: GST effect on cars: Hybrid cars like BMW i8, Toyota Camry & Honda Accord become costlier by upto INR 45 lakh

However, the implementation of GST has resulted in an unfavourable business model for hybrid car manufacturers in India. Post GST implementation, the Maruti Suzuki Ciaz and Ertiga SHVS hybrids have become costlier by around INR 1 lakh, while the Toyota Prius & Camry Hybrids have seen a price hike of up to INR 8-10 lakh. In the luxury segment, prices of Volvo XC90 have been increased by around INR 16 lakh, while the BMW i8 costs INR 50 lakh more. People in the know how said that a decision is expected on August 5, 2017 regarding the GST rates on hybrid cars.