I will ask FM to cut tax rate on hybrid vehicles: Gadkari

Union Minister Nitin Gadkari on Thursday said that he will urge Finance Minister Arun Jaitley to bring down GST rate on hybrid vehicles and other automobiles that run on alternate fuels.

Under the GST rates announced last week, hybrid cars, which are considered eco-friendly, are slated to attract a 15 per cent cess over and above peak rate of 28 per cent, same as those of large luxury cars and SUVs.

The automobile industry has expressed concern on the high rate on hybrids stating it would put a spanner in the wheels of government plans to promote green vehicles.

At present hybrid vehicles attracts excise duty of 12.5 per cent with an effective overall tax rate of 30.3 per cent.

"I will be meeting Arun Jaitley soon to request that tax slabs for vehicles run on ethanol, bio diesel, bio CNG should be reduced. I will also request him to reduce tax rate on hybrid vehicles in order to tackle air pollution in the long run," Road Transport and Highways Minister Nitin Gadkari told PTI in an interaction.

The minister, who also holds Shipping portfolio, said the government's policy is to promote electric mobility in the country. GST rate on electric vehicles has been kept at 12 per cent.

"It is our policy to encourage electric cars and buses.

Shortly, I will be coming out a policy regarding this. Hybrid cars should also be encouraged, it saves fuel," he said. Electric and hybrid vehicles along with alternate fuels like ethanol should be encouraged in order to reduce India's import of crude oil.

"We import crude worth Rs 7 lakh crore. Electric, ethanol, bio diesel, bio CNG these are import substitutes and are cost effective, pollution free and indigenous too," Gadkari said.

If such vehicles are encouraged on a large scale, the cost will also come down, he added.

Auto industry is also planning to take up the matter of higher tax rate on hybrid vehicles with the Finance Ministry this week.

Some of the popular hybrid vehicles sold in India are Camry Hybrid and Prius from Toyota and Honda Accord. These cars are priced between Rs 31.98 lakh and Rs 38.96 lakh. A host of other companies were also planning to foray into the segment. Calling himself "a go-getter" who believes in "bulldozing" obstacles, Union Minister Nitin Gadkari on Thursday said his target is to award work worth Rs 31 lakh crore by the time the government completes 5 years. These include contracts worth Rs 15 lakh crore to transform India's National Highways network and another Rs 16 lakh crore in the shipping area to bring water transport, on the back-burner so far, right in the front.

"I am a go getter... Obstacles keep on coming but I believe in bulldozing road blocks... It is my target to award work worth Rs 31 lakh crore in both highways and shipping sectors when we complete five years," the road transport, highways and shipping minister told PTI in an interview.

Listing details of work by his ministries on completion of three-years, Gadkari said contracts worth Rs 6 lakh crore has already been awarded in both the sectors out of Rs 31 lakh crore.

Work of this magnitude will create 2.5 crore jobs directly and another 2.5 crore indirectly besides contributing 3 per cent to GDP growth, he said.