Assocham seeks GST sop for range-extended electric vehicles

One of lndia's top industry lobbies has asked the government to initiate discussions on providing range-extended electric vehicles or REEVs, a type of hybrid vehicle, tax parity with EVs to incentivise automakers to introduce such models.

- Ayaan Kartik

Incentives for hybrid vehicles have already divided Indian automakers.

REEVs are electric vehicles supported by a small internal combustion engine to charge the battery when it is running low.

Currently, no Indian manufacturer sells such vehicles in India. They are not classified differently under the Goods and Services Tax (GST) regime. Hybrids attract a tax rate of 18% and 40%, depending on their size.

The Associated Chambers of Commerce and Industry of India (Assocham) has written to the ministry of heavy industries (MHI) that the current tax structure would force automakers to introduce such vehicles at a higher price, as they are generally heavier and bigger in size. Assocham counts Maruti Suzuki India Ltd, Toyota Kirloskar Motors India Ltd, JSW: Group and Mahindra and Mahindra Ltd as its members.

Incentives for hybrid vehicles have already divided Indian automakers.