26 states have already implemented EV policies
NEW DELHI: Reaffirming India’s commitment to its EV policy aimed at achieving carbon neutrality by 2070, G20 Sherpa Amitabh Kant stated on Tuesday, September 3, that the expansion of EV charging infrastructure across the country is addressing a key challenge in popularizing electric vehicles.
During a discussion on Tuesday, Kant highlighted that 26 states have already implemented EV policies, which has led to the GST for electric vehicles being set at 5 per cent.
GST rates
He confirmed that the GST rate of 5 per cent for electric cars and 28 per cent for hybrid cars is expected to remain unchanged for the foreseeable future.
“Our policy framework is focused on accelerating the electrification of mobility in India, utilizing all available policy tools, including the CAFE (Corporate Average Fuel Efficiency) norms,” Kant emphasized.
While hybrid cars are taxed at a GST rate of 28 per cent, additional cesses and taxes bring the effective tax rate on hybrids to approximately 48 per cent. Major hybrid car manufacturers like Maruti Suzuki and Toyota Kirloskar Motors have long advocated for a reduction in GST on hybrid vehicles, arguing that electric vehicles alone cannot shoulder the entire burden of reducing emissions.
Conversely, automakers such as Tata Motors, Hyundai, Kia, and Mahindra & Mahindra argue that a full commitment to electric vehicles is necessary to fully decarbonize India’s roads.
UP Government order
On July 5, the Uttar Pradesh (UP) government issued an order waiving the 8-10 per cent registration tax on strong and plug-in hybrid cars, resulting in a reduction of up to Rs4 lakh in the on-road prices of these vehicles.
However, Tata Motors, Hyundai, Kia, and Mahindra & Mahindra strongly opposed the order, contending that the nascent electric car industry in UP—one of India’s largest car markets—requires focused support.
During an August 11 meeting with the UP government, these automakers expressed concerns that incentivizing plug-in and strong hybrid vehicles at this critical stage could harm the electric car segment.
In contrast, Maruti Suzuki, Toyota, Honda, and Bajaj supported the July 5 order, arguing that incentives should be extended to all green technologies, including plug-ins and strong hybrids, as these can expedite carbon emission reductions in the state. The UP government, agreeing with their stance, decided not to rescind the July 5 order.
