Union Minister for Road Transport and Highways, Nitin Gadkari, has proposed a significant reduction in taxes on hybrid vehicles, aiming to slash the current 48 percent GST on such vehicles to 12 percent. This move could notably impact the pricing of popular hybrid cars like the Toyota Innova Hycross in the market. The Toyota Innova Hycross, known for its predecessors’ success, has drawn considerable attention. Among its variants, the top-end ZX(O) Hybrid Innova Hycross currently costs Rs 35.5 lakh on the road, inclusive of various charges such as ex-showroom price, RTO charges, insurance, CESS, and GST for both state and center.
Under the current tax structure, the ex-showroom price includes 28 percent GST (both state and center) along with 15 percent CESS. Without these components, the ex-factory cost of the Innova Hycross Hybrid stands at Rs 21.5 lakh. Now, with Gadkari’s proposal, if GST on hybrid cars drops to 12 percent, it would significantly impact the car’s overall price. Following the reduction, the ex-showroom cost of the Innova Hycross Hybrid would be approximately Rs 25.5 lakh, inclusive of 15 percent CESS and 12 percent GST.
This reduction would notably alter the vehicle’s price, with a difference of around Rs 5.5 lakh in the ex-showroom price. Consequently, there would also be a decrease in the on-road price, estimated to vary between Rs 7-10 lakh depending on the city.
Similarly, other hybrid models like the Grand Vitara, Toyota HyRyder, and Honda City Hybrid would likely experience price drops. For instance, the top-end Alpha Plus DT Hybrid variant of the Grand Vitara, currently priced at Rs 20.09 lakh ex-showroom, includes 28 percent GST and 15 percent CESS. If GST reduces to 12 percent, the ex-showroom price of the car would also decrease. The revised ex-showroom price, considering 12 percent GST and 15 percent CESS, would be around Rs 14.54 lakh, indicating a difference of nearly Rs 5.5 lakh.