Toyota Pushes for 21% Tax Cut on Hybrid Vehicles, Emphasising Environmental Benefits

Toyota Pushes -Tax Cut - Hybrid Vehicles-Emphasising- Environmental Benefits-TAXSCAN

Toyota Motor is actively involved in lobbying the government, calling for a significant tax reduction on hybrid vehicles, according to a Reuters report. The company is pushing for a substantial 21 percent tax decrease, which would represent a one-fifth reduction from the existing tax rate.

Toyota’s rationale centers around the idea that hybrid vehicles should receive policy incentives, primarily due to their substantially reduced environmental footprint when contrasted with traditional gasoline-powered cars. The company maintained that the current tax discrepancy, with petrol vehicles taxed at 48 percent and hybrid vehicles at 43 percent, fails to adequately acknowledge the environmental advantages of the latter.

For perspective, electric vehicles (EVs) currently incur a mere 5 percent tax in India, aligning with the government’s strong push to promote EV adoption. However, Toyota has set its sights on expanding the production of hybrid vehicles to cater to increasing demand.

According to a letter penned by Vikram Gulati, Toyota’s India country head, to the Niti Aayog on September 20, the world’s largest automaker is actively advocating for an 11 percentage points reduction in tax differentials for hybrid vehicles and a 14-point reduction for flex-hybrid options when compared to petrol cars. If successful, these reductions would result in tax rates of 37 percent for hybrids and 34 percent for flex hybrids.

In addition to tax revisions, Toyota is also requesting that the government implement an incentive scheme aimed at offering discounts to buyers of hybrid vehicles, similar to the incentives currently provided to EV buyers. This multifaceted approach is indicative of Toyota’s commitment to advancing the cause of hybrid vehicles in India’s evolving automotive landscape.

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