Nitin Gadkari advocates for tax incentives for hybrid cars, recommends proposal to Finance Ministry

Union Minister for Road Transport and Highways, Nitin Gadkari, has hinted at a possible tax concession for hybrid cars in India in the coming months. According to reports, the government is considering lowering the GST rates for hybrid vehicles to five per cent and 12 per cent for flex-engine powered vehicles.

Several leading automakers in India, including Maruti Suzuki, Hyundai, and Toyota, have been lobbying for tax cuts on hybrid vehicles. They argue that these cars emit lower pollutants, making them eligible for tax concessions compared to traditional petrol or diesel vehicles. However, Tata Motors has opposed the tax cut, stating that hybrid cars still use internal combustion engines and emit pollutants.

Gadkari’s proposal includes reducing the tax rate for hybrid vehicles to 12 per cent from the current rates of 28 per cent for sub-four-metre cars and 43 per cent for vehicles above four metres. This move is in line with his vision to eliminate petrol and diesel vehicles in India and shift towards a green economy.

The minister believes that transitioning away from petrol and diesel vehicles is not only possible but necessary for the country’s economic growth. He aims to reduce India’s annual fuel import costs of ₹16 lakh crore by promoting biofuels and alternative energy sources to benefit farmers, villages, and the youth with improved livelihoods and employment opportunities.

Since 2004, Gadkari has been advocating for alternative fuels and is confident that the shift towards electric vehicles and biofuels will occur within the next five to seven years. He acknowledges the challenges but remains optimistic about India’s ability to achieve energy independence through sustainable practices.