Tata-Toyota fight over hybrid tax, know who has the upper hand in front of the government
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New Delhi: There is a war going on between the two leading automobile manufacturers of India and Japan, Tata Motors and Toyota Kirloskar Motor (TKM) regarding the tax on hybrid cars. Tata Motors is emphasizing on manufacturing and selling electric cars in India, while Toyota is launching hybrid cars in the market. In order to promote electric vehicles, Tata Motors has urged the government to maintain the current tax on hybrid cars, while Japanese company Toyota is lobbying to reduce the hybrid tax.
Hybrid technology is between ICE and EPE.
In fact, vehicle manufacturing companies are adopting hybrid and electric propulsion engine (EPE) technology as an alternative to cars running on petrol-diesel and internal combustion engine (ICE) technology. Hybrid engine vehicles are a midway between ICE technology and EPE technology based vehicles. Hybrid vehicles have two types of engines based on ICE technology and EPE technology, which run on petrol-diesel as well as CNG gas or electrically charged batteries. Hybrid cars are taxed more by the government than ICE and EPE based cars. Due to this, companies like Toyota are facing huge losses.
How much is the tax on which cars?
According to media reports, currently in India, hybrid cars using petrol engine and electric motor along with electric battery pack are taxed up to 43 per cent, while only ICE based petrol cars are taxed up to 48 per cent. At the same time, under the GST (Goods and Services Tax) system, electric cars are taxed at the rate of 5 percent. Despite emitting fewer pollutants into the environment, hybrid cars are taxed more than their petrol engine counterparts in India. This has been a point of debate in the auto industry, as many have appealed to the government to reduce the tax rate for hybrid cars, as they emit less pollution than petrol models.
Mahindra and Hyundai also in favor of Tata
According to a report by news agency Reuters, automakers like Toyota selling hybrid cars in India are demanding from the government to reduce the heavy tax imposed on these cars. Whereas Tata Motors, the leading automobile manufacturer in the ICE and EV segment, has urged the government to maintain the current slab of hybrid tax. Quoting government sources, the report said that Tata Motors’ rival companies Mahindra & Mahindra and South Korea’s Hyundai Motors have also appealed to the government to maintain the current policy of hybrid tax.
War between Tata and Toyota
The report said that domestic automaker Tata Motors has claimed that tax on hybrid cars should not be cut as they emit more pollution than electric vehicles. He has opposed Toyota’s appeal to reduce taxes on hybrid cars. At the same time, Toyota Kirloskar Motors, the world’s biggest player in hybrid cars, has appealed to the government to cut the hybrid tax. The Japanese automobile manufacturer has claimed that hybrid cars emit less carbon than petrol cars.
Tata wrote a confidential letter to the government
The government has found a middle path amid the war between Tata and Toyota over tax on hybrid cars. There is also news that after Toyota’s appeal, the Ministry of Trade Promotion and Industry of India has requested the Ministry of Heavy Industry to rationalize the cess (cess) on hybrid cars in December 2023. Tata Motors currently seems to be angry with this step of the Ministry of Trade Promotion and Industry. Following this, Tata Motors has reportedly met government officials and written to the Ministry of Trade Promotion and Industry saying that the country is facing an urban air quality crisis with health implications. In such a situation hybrid should not be encouraged. Tata reportedly wrote in a confidential letter to the ministry that any further promotion of hybrids would be detrimental to climate goals and the country’s economy.
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