Rs 7-lakh off on Toyota Innova Hycross?

Rs 7-lakh off on Toyota Innova Hycross?

Published 4 hours ago on March 20, 2024By Swaraj Acharekar

The Government of India is trying its best to promote EVs and flex-fuel with several incentives. But the same can’t be said about hybrids, as currently they are taxed almost on par with their petrol counterparts leading to high prices on hybrid cars like the Innova Hycross. Now Nitin Gadkari has stated that taxes on hybrid cars could be reduced. Models like Toyota Innova Hycross, Maruti Grand Vitara could get cheaper by Rs 7 lakh. How? Let’s talk about the upcoming tax structure for Hybrid cars in India.

Nitin Gadkari, Minister of Road, Transport & Highways, was speaking at News18’s Rising Bharat Summit 2024. He stated that the 43% (28% GST + Cess on hybrids is quite unfair as hybrids, though not as clean as EVs, are better than ICE engines in this aspect. Going further, he urged the finance minister to discuss this issue at the next GST council meeting. Nitin Gadkari Ji wants GST to be reduced to 12% as it will help make hybrid cars more affordable.

Hybrid cars in India – What does this mean to you?

Currently, GST (28%) + Cess (15%) on hybrids is 43%. Nitin Gadkari has urged to slash the GST to 12%, leading to GST (12%) + Cess (15%) =27%. So hybrids could get cheaper by 16%. For example, if the current ex-showroom price of a car like Innova Hyrcross is Rs 25 lakh (including 15% cess + 28% GST), then under the new taxation the ex-showroom price of the car would reduce to Rs 18 lakh (15% cess + 12% GST). This gives us a massive saving of 6 lakh making hybrids even cheaper than their petrol counterparts in some cases.

Toyota’s plea

Toyota has been urging the government to reduce taxes on hybrid cars. Last year, Toyota India’s country head sent a letter to Niti Aayog. At that time the brand was looking to bring the tax for hybrids to 37% and flex-fuel hybrids to 34%. Along with that, the brand was also looking for government incentives on road taxes etc like it offers to EV buyers. Though the company and Niti Ayog didn’t respond to the rumours at that time, Toyota’s request seems to be heard.