Hybrid cars must haul the cess load for longer
NEW DELHI : Hybrid cars in India may remain pricey for a while, with a top panel tasked to review taxes on them yet to formally meet even once, in the backdrop of a divided auto industry. Besides, any change in automobile taxes is unlikely without a comprehensive overhaul in the GST framework, two people aware of the development said.
On 11 January, the Union heavy industries ministry formed a panel of vehicle testing agencies, petroleum ministry officials and auto industry bodies to study whether hybrids should have lower compensation cess.
The cess, levied on top of goods and services tax, depends on vehicle type, engine size and fuel. Generally, small cars attract a cess of 1-3%, while SUVs and luxury cars bear 15-22%. For hybrids, the cess for current models is 15%, taking the total tax levied on them to 43%. Battery EVs face 5% GST, and no cess.
