Maruti Seeks Tax Relief For Hybrid, CNG Cars
A worker cleans Maruti Suzuki India Ltd. cars at a showroom in Mumbai. (Photographer: Adeel Halim/Bloomberg)

Maruti Seeks Tax Relief For Hybrid, CNG Cars

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The country's largest carmaker Maruti Suzuki India Ltd. is pitching for tax relief for hybrid and CNG cars in addition to electric vehicles in order to promote green mobility in the country.

Maruti Suzuki India Chairman RC Bhargava said there is a need to promote hybrid and CNG cars as it will take some time for mass acceptance of electric vehicles considering the high cost of technology right now.

"Personally we would like to see GST benefits linked to greener/cleaner cars. The Government gave tax cut on electric vehicles but hybrid should be given duty cut. There should be tax cut on CNG vehicles as well," he told a news channel.

The hybrid cars are 25 to 30 percent more efficient and will help reduce oil imports, he added.

"For industrial development, reducing oil import costs is important. Hybrids and CNG will help. Government should look at both hybrids and CNG options before we transition to EVs," Bhargava noted.

The GST Council last month reduced the tax rate on electric vehicles to 5 percent from the existing 12 percent, effective from Aug. 1. It also slashed the GST on electric vehicle chargers from 18 percent to 5 percent.

Also read: Maruti Suzuki Cuts Over 3,000 Temporary Jobs Due To Slowdown

However, there is no tax relief for hybrid and CNG cars. GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 percent plus cess.

Bhargava said so far the government has not announced any target for electric vehicle four-wheelers in the country.

He added that customers' acceptance depends on availability of charging infrastructure, range and cost. Even the FAME scheme did not have any subsidy for private cars, he added.

"The cost of the electric vehicles with the current technology will be very high. It could be more than double the price of internal combustion vehicles. This may not attract private car buyers...not the right time for mass acceptance for electric vehicles," Bhargava said.

The company, however, is working on bringing a small electric vehicle which would primarily target cab aggregators like Ola and Uber, he added.

Also read: Auto Slowdown: More Layoffs May Be Coming In Sales, R&D

Similarly, the company will also continue to bring in more CNG vehicles, Bhargava said.

"Last year, CNG saw an increase of 40 percent in volumes. All small cars in our portfolio will get converted to CNG," he added.

To promote 'Make in India', the government must encourage factory-fitted CNG vehicles, Bhargava said.

He added that the company will discontinue 1.3-litre engine diesel vehicles. "But that doesn't mean we will discontinue Vitara Brezza. It will continue. We will introduce a petrol variant of Vitara Brezza before the end of 2019-20 fiscal. We are not phasing out the model," Bhargava clarified.

Also read: Auto Inventory Declines By Nearly Half In July

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