Nitin Gadkari bats for hybrid car tax sops, proposal sent to Finance Ministry

Union Minister for Road Transport and Highways, Nitin Gadkari has hinted that the Indian government is serious about lowering the GST rates for hybrid cars, reported PTI. The minister reportedly stated that the proposal to reduce GST on hybrid vehicles to five per cent and to 12 per cent for flex-engine powered vehicles has been sent to the Finance Ministry, which is considering the request.

Gadkari's comment comes at a time when several carmakers present in India have been lobbying for tax cuts on hybrid vehicles. Leading auto OEMs such as Maruti Suzuki, Hyundai and Toyota are among them. These automakers have lobbied for the lower tax for hybrid cars stating that they emit lower pollutants into the environment, which should make them eligible for tax concession compared to pure petrol or pure diesel vehicles. However, Tata Motors has lobbied against the tax cut saying that even though the hybrid cars are electrified vehicles, they come propelled by internal combustion engines and emit pollutants into the environment, which should be enough not to offer tax concession to such vehicles.

Gadkari recently proposed a tax reduction for hybrid vehicles to 12 per cent from the current slab. Currently, sub-four-metre hybrid cars are slapped with 28 per cent GST, while hybrid vehicles measuring above four-metre are taxed at 43 per cent.

Gadkari aims to eliminate petrol and diesel vehicles

As part of his ambition to make India a green economy, Gadkari has reportedly vowed to get India rid entire of the more than 36 crore petrol and diesel vehicles. When asked if it is possible for India to get rid of petrol and diesel cars altogether, the minister said it is 100 per cent possible. "It is difficult but not impossible. This is my vision," he reportedly said.

The minister added that India spends ₹16 lakh crore on fuel imports every year. This money can be used to improve the lives of farmers, villages will be prosperous and the youth will get employment, by reducing the import of fossil fuel. However, he did not give any timeline to meet this ambitious target. The minister reportedly said that he firmly believes India can end fuel import by promoting the use of biofuels.

Gadkari also said that he has been pitching for alternative fuels since 2004 and is confident things will change in the coming five to seven years. "I cannot give you a date and year for this transformation to take place as it is very difficult. This is difficult but not impossible," Gadkari asserted. The minister also reportedly said that he firmly believes that given the speed with which electric vehicles are being introduced, the coming era will be of alternative and biofuels and this dream will come true.