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Old 26th July 2017, 17:30   #1
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Default Government might scrap 15% 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.

Government might scrap 15% cess on Hybrid cars-prius.jpg

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.

Government might scrap 15% cess on Hybrid cars-toyotacamryhybrid02.jpg

Source:The Telegraph India

Last edited by TusharK : 26th July 2017 at 17:42.
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Old 26th July 2017, 17:35   #2
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It augurs well for the public if implemented. At one hand honourable PM wants tesla to come and invest in india and on other hand the government dissuades public from buying hybrid cars by increasing the taxes. It augurs well for the environment too. Wish it happens sooner than later.
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Old 26th July 2017, 18:05   #3
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Default re: Government might scrap 15% cess on Hybrid cars

I hope they use this opportunity to define a hybrid properly (eg. Cars with a plug and/or a minimum all-electric range of at least 8-10km).

If they don't do it, then the Marutis and Mahindra's of the world will keep pushing off Mild-Hybrids like Ciaz/Ertiga and Scorpio and keep enjoying benefits meant for the real deal.

Doing 8-10 km off pure electricity isn't too expensive (in terms of battery capacity) to achieve either. They will barely need 2KWh of energy to achieve it. That's about equal to a 150Ah household inverter battery.

The additional requirement for batteries may just be able to trigger additional production and reduction in costs due to economies of scale and set the ball rolling for our fully electric future.
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Old 26th July 2017, 18:33   #4
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Default re: Government might scrap 15% cess on Hybrid cars

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Originally Posted by antz.bin View Post
The additional requirement for batteries may just be able to trigger additional production and reduction in costs due to economies of scale and set the ball rolling for our fully electric future.
Very right! We need mass-market genuine hybrids and electric vehicles NOT mild hybrids with silly stop-start technology or premium saloons and hefty SUVs costing 40L+.

In my mind, MoRTH should do the right thing, not what the auto industry wants them to do. Look at the momentous decisions by France and now Germany to publicly announce phase-outs!
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Old 27th July 2017, 09:01   #5
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Default re: Government might scrap 15% cess on Hybrid cars

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Originally Posted by drashkum View Post
It augurs well for the public if implemented. At one hand honourable PM wants tesla to come and invest in india and on other hand the government dissuades public from buying hybrid cars by increasing the taxes. It augurs well for the environment too. Wish it happens sooner than later.
Hybrids and Tesla are opposite ends of the same rope. Tesla is no where related to this tax.
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Old 27th July 2017, 10:23   #6
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Default re: Government might scrap 15% cess on Hybrid cars

I want the government to make regulations like the Chinese do, domestic manufacturing for electric with limited benefits for hybrid. This was done to ensure that Japanese companies don't corner the market with hybrid.

This might sound protectionist but, it's a rare shift that they have no intention of passing up to any foreign player. They play by their own rules, it's the payoff from two decades of surrendering labour rights in exchange for capacity that the rest of the world cannot catch up to now.

Pure electric is leveraging massive investment in solar which has reduced solar panel prices and dependency on imported energy. Unlike us, local businesses stand to be the biggest beneficiaries in what is predicted to be the largest car market in the world.
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Old 27th July 2017, 10:51   #7
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Default re: Government might scrap 15% cess on Hybrid cars

I feel Hybrids should be taxed at 12 or 18% GST slab to promote it further. There are barely any Hybrids in the market hence the tax revenue loss won't be much in rupee value to the govt, however, it will signal off a great encouragement for players to adapt the technology quicker.

Nonetheless, removing the cess is a fair move for now.
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Old 27th July 2017, 11:32   #8
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Default re: Government might scrap 15% cess on Hybrid cars

Did the sales of Ertiga, Ciaz diesel fall drastically? Would like to know who were the ones to lobby and influence the Govt.? I would agree if it were only Toyota, Honda lobbying for Prius or the Accord.
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Old 27th July 2017, 13:25   #9
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Default re: Government might scrap 15% cess on Hybrid cars

If the government were to encourage use of hybrids over conventional ICE cars, they've got to do lot better than this. The entry point (even if their GST were to be 28% as proposed) is still a steep 35-40L (which majority of us cannot afford plonking in a car).

I remember in the early 2000s where there was a serious upsurge of hybrids (more specifically Prius) in the US. People simply didn't buy because they wanted to go-green. There were fringe benifits like tax credit, driving on HOV lanes. Its the government that pushed the sales, plus celebrity buys increased its desirability quotient. The Prius sold despite its oddball looks.
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Old 27th July 2017, 16:33   #10
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Default Re: Government might scrap 15% cess on Hybrid cars

Shows that the government is willing to make amends where required . Agreed with the planned move, but I just hope they extend this benefit to 'real hybrids' and not the lame SHVS / micro-hybrid.

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Originally Posted by narayans80 View Post
The entry point (even if their GST were to be 28% as proposed) is still a steep 35-40L (which majority of us cannot afford plonking in a car).
True. From all the manufacturers, it is only Toyota that can bring hybrids to the masses in India. Unfortunately, Toyota India is awfully slow and is more of a follower than a leader. Leave aside fancy hybrid tech, they haven't even been able to launch truly contemporary cars under 10 lakhs.
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Old 27th July 2017, 17:26   #11
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Default Re: Government might scrap 15% cess on Hybrid cars

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Originally Posted by antz.bin View Post
I hope they use this opportunity to define a hybrid properly (eg. Cars with a plug and/or a minimum all-electric range of at least 8-10km).

If they don't do it, then the Marutis and Mahindra's of the world will keep pushing off Mild-Hybrids like Ciaz/Ertiga and Scorpio and keep enjoying benefits meant for the real deal.

Doing 8-10 km off pure electricity isn't too expensive (in terms of battery capacity) to achieve either. They will barely need 2KWh of energy to achieve it. That's about equal to a 150Ah household inverter battery.

The additional requirement for batteries may just be able to trigger additional production and reduction in costs due to economies of scale and set the ball rolling for our fully electric future.
Totally agree with you here. Maruti has so far taken the maximum advantage of the excise benefit without providing anything significantly better.
But I am sure here Maruti would have lobbyed the maximum for the excise reduction on Hybrids and they might get away by having the mild hybrids included in lower slab as well. I just hope this doesn't happen.
Maruti lobbied to get the crash test speed reduced for India for the general NCAP speed for crash testing of 60km/h to 54 km/hr for India. This is just unethical. A 10% reduced crash test speed means a 20% weaker structure would pass the test.
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Old 29th July 2017, 09:47   #12
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This is not going to happen as the transport minister has said yesterday that they only want to promote bio fuel and electric cars and reduce the number of private vehicles on Indian roads. While I whole heartedly support this government, the biggest worry for me is that more than private cars, private scooters are increasing on a serious scale and those need to be curbed first after which they can go after private cars.
Public transport is a hit and a miss and so called ola uber drivers either don't know the roads or are reckless and break signals and drive rashly.
Political parties come and go but the attitude of the babbudom towards living in their little bubble in Delhi doesnt seem to change.
If you want to promote e cars first step is to introduce all hybrids, discourage diesel all together ( so people have alternatives ) and create an ecosystem for e cars. It takes time to do the switch around but typical Indian thing is to just jump and hope we land on to something. Let's see where we go from here.
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