GST Council to rethink steep taxes on hybrid vehicles

The GST Council will rethink on the steep taxes that have been proposed on hybrid vehicles during its meeting next week. The new tax slabs are expected to come into force from July 1, 2017, after the implementation of GST in India.

Last week, the GST Council had announced tax slabs on the automotive industry under the new tax reform. According to this announcement, hybrid vehicles were put under a tax slab of 43%. This marked a steep rise from the current effective tax rate of 30.3%. The council had pegged mid and large size hybrid vehicles under the same tax slab as large SUVs and passenger cars.

This steep tax rate proposal by the GST Council was followed by inputs from various automakers, who voiced their disappointment at the government's plans. Automotive manufacturers also claimed that such high tax rates on hybrid vehicles can act as a deterrent and affect the government's long-term plans for promoting electric vehicles.

After receiving the aforementioned inputs from the automotive industry, the GST Council has reportedly decided to reconsider the tax slabs for hybrid vehicles during its next meeting, which is scheduled for June 3, 2017.

Source: TOI