Hybrid or electric? Which fuel type will benefit from Union Budget 2024?

KOCHI: As Finance Minister Nirmala Sitharaman presents the first budget of the third Modi government on July 23, the reduction of tax on hybrid vehicles might be one of the announcements. Leading companies point out that the growth of the hybrid car market is the first step towards a full transition to electric vehicles. Currently, 28 percent goods and services tax (GST) is levied on hybrid vehicles. It is expected that the tax on hybrid vehicles that run on petroleum as well as in electric mode will be reduced to 18 per cent.

Representatives of leading companies like Maruti Suzuki and Toyota Kirloskar informed the Finance Minister that the unaffordable tax is adversely affecting the sales of hybrid vehicles. Yesterday, the Uttar Pradesh government had completely waived the registration fee for large hybrid vehicles.

At the same time, domestic companies such as Tata Motors, Mahindra and Mahindra have called for measures to promote the sale of electric vehicles. They also say that if hybrid vehicles are given priority, the e-vehicle market will suffer.