UP tax cut recognise hybrid cars' importance in cutting emissions: Maruti Suzuki

Maruti Suzuki India's Chairman RC Bhargava on Tuesday said the 100 per cent registration waiver for hybrid vehicles announced by the Uttar Pradesh government recognises the fact that multiple technologies are required to reduce carbon emissions and oil imports. He also said that this step recognises the hybrid vehicles' importance in reducing vehicular emissions.

The Uttar Pradesh government on Tuesday announced a 100 per cent registration tax waiver on strong hybrid and plug-in hybrid vehicles. This move will lead to a drop in the prices of hybrid cars in the state by up to ₹3.5 lakh, making the electrified vehicles significantly affordable for many consumers. This move is expected to boost sales and demand for hybrid cars. Interestingly, the announcement comes at a time when there is a strong debate in the auto industry about the tax sops for hybrid vehicles. While many automakers like Toyota have been advocating for a GST rate cut for hybrid cars, OEMs like Tata Motors have opposed this demand.

Watch: Maruti Suzuki Grand Vitara: First Drive Review

Speaking to PTI, Bhargava said that this move by the UP government would also inspire other states across India to consider such proposals. "The UP government action is the first instance where a state government has realised and acted on the fact that multiple technologies are required for reduction in carbon emissions and oil imports," he stated.

Bhargava further asserted that electric cars are not the only option, there are other effective technologies like hybrid cars to tackle the issue. Interestingly, Toyota too had previously said the same. With this move by the UP government, cars like the Maruti Suzuki Grand Vitara, Toyota Innova Hycross and Urban Cruiser Hyryder which come with strong hybrid technology, will become more affordable for customers in Uttar Pradesh.

Hybrid cars attract 43 per cent tax

The hybrid vehicles come powered by an internal combustion engine that is paired with one or more electric motors, which use energy stored in batteries. In India, currently, the total tax incidence on hybrid vehicles is 43 per cent, which is inclusive of GST, while battery electric vehicles attract a tax of about five per cent. This makes the hybrid cars significantly higher priced compared to the electric vehicles, despite the hybrid models generating lower emissions than their pure petrol or diesel counterparts.

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