Indian Govt Likely to Revise GST Rates on BSVI and Hybrid Vehicles

With new emission standards coming into effect, prices of cars are likely to increase from 2020 onwards.

With the automotive sector struggling with unsold inventory and lack of demand from consumers, the Indian government is likely to reconsider its stance on high GST rates for BSVI vehicles as well as hybrid cars in the country.

Union minister Nitin Gadkari on Thursday assured the crisis-hit automobile industry of all possible support from the government, including taking up the demand of GST reduction with finance minister Nirmala Sitharaman.

With the impending price increase of vehicles and the upcoming of BS VI norms deadline, "it is your (industry's) demand that there should be reduction in tax of petrol and diesel vehicles. Your suggestions are good. I will take your message to the finance minister," Gadkari said at annual SIAM convention here.

Even if it (GST) is reduced for some time, it will help, he added.

"I will follow it up with the finance minister. The sector needs help right now to increase vehicle sales," Gadkari said.

The minister said, like the way GST on electric vehicles has been reduced to 5 percent from 12 percent, he would propose to the finance ministry to extend the same benefit to hybrids vehicles.

"We have reduced GST in electric vehicles. Now I am trying that GST on hybrid vehicles is also reduced. I am following up regarding this with the finance minister," Gadkari said.

Gadkari, who had in 2017 stated the auto industry would be "bulldozed" if they didn't push for electric vehicles, also struck a reconciliatory note saying that the government has no intention to ban petrol and diesel vehicles.

"There have been talks that government is planning to ban petrol and diesel vehicles. I want to make it clear that the government has no such plan. We are not going to do anything like that," he said.

He also said he would take up a discussion with the finance minister for extending possible export incentives on automobile makers, as has been done for the sugar industry.