Govt. plans to scrap 15 percent cess on Hybrid cars

If recent media reports are to be believed, the government is planning to scrap the 15 percent cess imposed on hybrid cars. It has been reported that the GST Council could be asked to withdraw the additional tax on hybrid vehicles following intense lobbying by car manufacturers. 

Under GST, all hybrid vehicles were imposed with an additional 15 percent cess over and above a 28 percent GST. This meant, buyers of hybrid cars were forced to pay 43 percent in taxes as opposed to 30.5 percent pre-GST, amounting to a tax hike of 12.5 percent.

As a result, post-GST prices of hybrid cars have skyrocketed. Prices of Toyota's hybrid models have gone up by Rs. 3.5-5.2 lakh. Similarly, implementation of GST has adversely affected prices of "mild hybrid" versions of the Maruti Ciaz and Ertiga with a price increase of over Rs. 1 lakh.

According to media reports, a decision on the revision of GST rates for hybrid cars is expected to be taken by the GST Council at its next meeting scheduled for August 5, 2017.

Source: The Telegraph India