CHENNAI: The rollout of the goods and services tax (GST) might have made things cheaper for most auto customers, but the taxation on hybrid vehicles has hit 43 per cent, nearly twice its earlier tax incidence.
Despite this, and reports that firms might rethink hybrid product launches in the future, both the country’s leading carmaker— Maruti Suzuki India and Toyota Kirloskar Motor – have asserted that they will continue to hold firm on their hybrid plans.
Toyota Kirloskar Motor’s N Raja, director and senior vice-president, said on Saturday that the firm’s strategy on hybrids would hold steady and that there was no change in its plans for the segment in India.
“We will continue with this journey of hybrid vehicles in India. Our commitment remains the same and we believe that this technology is good for the environment,” he said, adding that the company would continuously engage with the government on the high rate of GST imposed.
The 43 per cent tax imposed on hybrid vehicles have resulted in prices of Toyota’s hybrid versions of Camry to shoot up by as much as Rs 5 lakh.
However, while the reports said that Toyota might stop the hybrid model, Raja pointed out that the company had sold 1,300 cars last year, of which 95 per cent were hybrids.
On the other side, Maruti Suzuki has confirmed that it will continue to sell its hybrids, and make some more, too. The manufacturer, which currently makes the Ertiga and Ciaz hybrids, said last week that “while GST did not allow benefits on hybridisation”, the firm would continue to communicate on the issue with the government.Prices of mild-hybrid variants of Ciaz and Ertiga have gone up by more than Rs 1 lakh post GST.
Tax on hybrids at 43%
Hybrid vehicles are on the same slab as luxury cars at 28 per cent GST plus 15 per cent cess at present. At 43 per cent, total tax incidence on these vehicles is higher under the new regime from the previous effective tax rate of 30.3 per cent