Hybrid cars are going to become more affordable in the state of Karnataka. Yes, because customers will get a huge tax break. Let us know what is the new plan of the Karnataka government.
The Karnataka government plans to provide tax breaks and financial incentives to automobile manufacturers manufacturing hybrid cars and electric vehicles. The state government also plans to reduce taxes on hybrid cars, which will increase sales of clean fuel technology vehicles in the state. The move is in line with the Uttar Pradesh government’s announcement before the Union Budget earlier this year, aimed at making hybrid vehicles more affordable in the state.
Citing a draft proposal prepared by the Karnataka government, Reuters reported that the state government is considering promoting the clean mobility sector there. India has so far focused on discounts on electric cars. The move could make Karnataka the second state after Uttar Pradesh to get tax breaks on electric and hybrid vehicles.
Interestingly, carmakers like Toyota and Maruti Suzuki, which manufacture hybrid cars, have been advocating for a tax exemption on these vehicles. Claiming that these electric vehicles emit less pollutants into the environment than their fossil-fuelled counterparts. On the other hand, Tata Motors and other carmakers have opposed this demand. It has claimed that subsidies on hybrids would hurt India’s goals of adopting electric vehicles.
Tax exemption for hybrid and electric vehicles
Karnataka is currently the third largest seller of electric vehicles in India. In a bid to boost the green mobility sector in the state, the state government is aiming to reduce the road tax and registration fee of hybrid cars priced below Rs 25 lakh from the current price. reduced from 18 per cent to 13 per cent. However, these benefits will be available only on chain hybrid cars. Not on the mild hybrid model, which makes this policy similar to the one introduced by the Uttar Pradesh government earlier this year.
Currently, the national road tax and registration tax is in addition to the 5% GST on electric vehicles and 43% cess on hybrid vehicles. Apart from reducing the road tax and registration fees for hybrid cars, the Karnataka government has also proposed to provide financial subsidies ranging from 15 to 25 per cent on investments made by companies in fixed assets such as land and machinery for new factories or for expanding existing ones. They have also proposed. These benefits will also apply to manufacturers of battery components or charging equipment for electric vehicles.
Apart from this, the Karnataka government is planning to provide an incentive of up to 25% on capital investment of manufacturers of electric vehicles or their components. The Karnataka government aims to promote the adoption of green mobility vehicles through this policy. The state government has mentioned electric vehicles, some hybrid and hydrogen vehicles. However, the government has not disclosed the timeline to finalise this policy.