Tax incentives for cleaner vehicles should stay: Toyota India head

Tax incentives for green mobility should continue for the benefit of consumers, according to the India head of Toyota Kirloskar Motor Pvt. Ltd, as the company continues to focus on electric and ethanol-powered vehicles.

- Manas Pimpalkhare

"Taxes have to be linked to the societal goals, national goals...[which] right now are to move away from fossil fuel, to decarbonize and to indigenize," Vikram Gulati, country head and executive vice president at Toyota Kirloskar Motor, told Mint in an exclusive interview.

"If you do not have a distinguishing taxation structure or rate differential between a petrol and a flex-fuel vehicle, inadvertently the consumer will have to pay more tax on a flex-fuel vehicle," he said. "The first thing that needs to be done is to look at that element and make sure the consumer is not being disincentivized on a cleaner technology."

That will boost demand and generate higher investments to develop manufacturing at scale and lower prices, Gulati said. He cited how 5% goods and service tax (GST) on electric vehicles, compared to the 18-28% GST range on fossil fuel vehicles, has helped boost sales for the zero-emission vehicles.