The Uttar Pradesh government has declared that registration tax on hybrid vehicles will be fully waived in order to encourage the usage of environmentally friendly modes of transportation. Chandigarh and Uttar Pradesh are the two states offering subsidies for hybrid cars. Popular models such the Toyota Camry, Maruti Grand Vitara, Honda City, Toyota Innova Hycross, and Toyota Urban Cruiser Hyryder will be impacted by this new regulation. Let's examine the specifics of the recently announced hybrid tax exemption rule in more depth.
The Minister of Road Transport and Highways, Nitin Gadkari, had previously suggested altering the tax system for hybrid cars. He suggested lowering the GST from 28% to 12% for hybrid vehicles. This cut would have resulted in a significant savings of up to Rs 7 lakh on well-known models like the Maruti Grand Vitara and Innova Hycross, among others.
The Uttar Pradesh government has promised a state-level subsidy on the registration of hybrid automobiles, despite the Ministry of Finance rejecting this proposal. The state government had eliminated the registration costs for electric cars as part of its 2022 EV program. Hybrid cars are now eligible for this subsidy as well.
The government has initially covered all models for this reimbursement, ranging from Rs 10 lakh to Rs 1 crore, although changes are anticipated to be made in due course. All registered models are eligible for the new tax cut through October 2025. Previously, a 10% cap was placed on the registration fee for any car—diesel, petrol, or hybrid—that cost more than Rs 10 lakh.
Prior to the EV policy being put into effect by Uttar Pradesh, Chandigarh was the first state or union territory in the nation to offer a tax exemption for hybrid vehicles. The objective of this effort was to promote the adoption of cleaner emission technologies and establish Chandigarh as a "model EV city." Initially, the entire registration fee was waived by the local government for any hybrid models sold between March 2023 and March 2028, including vehicles costing more than Rs 17 lakh but less than Rs 1 crore (ex-showroom). Subsequent changes were made, though, and as of right now, hybrid cars under Rs 20 lakh (ex-showroom) can get up to a 50% tax exemption from the Chandigarh Regional Transport Office.
What is your opinion on other states joining UP and Chandigarh in lowering their taxes on hybrid vehicles?
Comments