Hybrid car is a bridge between forced induction engines and electric power train. The future of such cars has become murkier after the implementation of Goods and Services Tax (GST) from July 1.

Volvo XC90 T8 plug-in hybrid
Volvo XC90 T8 plug-in hybridVolvo press

Narendra Modi government increased the tax rate on hybrid vehicles while other segments saw a drop. The hybrid cars now attract 43 percent total levies under GST (28 percent tax and 15 percent cess). The move invited a lot of flak.

Also read: 9 electric, hybrid cars sold in India that don't hurt the planet

However, the latest development indicates there is hope for hybrid cars. A report in The Telegraph claims the central government is planning to ask the GST Council to scrap the 15 per cent cess on hybrid cars. The move reportedly came after intense lobbying by Japanese and European car makers.

Hybrid cars witnessed a tax increase of 12.5 percent from the pre-GST taxation (30.5 percent). This led carmakers to hike the prices of hybrid models. Toyota's hybrid models like Camry and the Prius have become costlier by Rs 8 to 10 lakh after the introduction of the GST. BMW i8 price skyrocketed by up to Rs 50 lakh. The price of Maruti Suzuki mild hybrid models, Ertiga and Ciaz have also become dearer in July.

New taxation also put the introduction of hybrid cars in the country on hold. The report said a decision on the GST rates for hybrid cars will be taken by the GST Council on August 5.

Source: The Telegraph

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