Delhi government cuts VAT on electric and hybrid vehicles

In India, hybrid and electric cars come at a huge premium over their standard petrol or diesel powered siblings. We here at ZigWheels have always said that until the government doesn’t really show spine by cutting taxes on eco friendly cars, they will never be popular enough to be actually considered by the car buying audiences. And it seems that the ruling Delhi Government has finally taken heed and gone the right way.

As announced in the annual Delhi Budget, the government has cut Value Added Tax or VAT on all electric and hybrid vehicles from 12.5% to 5%. Now although this isn’t what we really expected in terms of pushing for a cleaner future of motoring, it certainly is a step in the right direction. The new costing structure will be active soon and will apply to all electric and hybrid vehicles ranging from electric rickshaws, electric passenger cars and hybrid passenger cars.

That said, it is unclear how the Delhi government is defining the term ‘Hybrid’. According to us, the term hybrid should only be applicable to cars that are actually equipped with a hybrid powerplant which means an electric motor working in tandem with a petrol or diesel powerplant and not applicable to cars that come with a ‘start-stop’ mild hybrid system. That said, we shall leave that decision to the law makers and policy makers of Delhi while we welcome the attempt to encourage cleaner cars into the Indian motoring scheme of things.