Union Minister Nitin Gadkari is one of the people who often makes headlines for his innovative ideas. In a recent interview, he promised to completely phase out over 36 million petrol and diesel vehicles, saying that while this would be challenging for India, it would not be impossible. Just weeks before this statement, the minister expressed his intention to reduce GST on hybrid cars sold in India. Mr Gadkari proposed reducing the current GST from 48 per cent on hybrid vehicles to 12 per cent. This reduction could have a significant impact on the prices of popular hybrid cars like the Toyota Innova Hycross in the market.
The recently launched Toyota Innova Hycross has attracted a lot of attention from buyers, following in the footsteps of its predecessors Innova and Innova Crysta. Toyota offers a robust hybrid version of this MPV priced between Rs 25.72 lakh and Rs 30.698 lakh (ex-showroom). A regular petrol engine version of the Innova Hycross is also available in the market at a cheaper price.
In our discussion, we will focus on the top hybrid variant of the Innova Hycross. Currently, purchasing the top-spec ZX(O) Hybrid Innova Hycross costs Rs 35.5 lakh on the go. This price includes ex-showroom price, RTO charges, insurance, CESS and GST for state and center.
In the current situation, the ex-showroom price includes GST of 28 per cent (for both states and the Centre) and CESS of 15 per cent. Without these components, the factory price of the Innova Hycross Hybrid is just Rs 21.5 lakh.
Reducing GST on hybrid cars to 12 percent would affect the overall price of the car. After this GST reduction, the ex-showroom price of the Innova Hycross Hybrid would be around Rs 25.5 lakh including 15 per cent CESS and 12 per cent GST.
This reduction will result in a significant price reduction for this vehicle. If you compare, the ex-showroom price will be around Rs 5.5 lakh lower than the current price. With the changed tax amount, the on-road price of the vehicle also decreases. Depending on where you live, you can expect a difference of around Rs 7-10 lakh in the on-road price of the vehicle.
While we are already talking about the price cut of the Innova Hycross, let us see how this GST reduction would affect the prices of other powerful hybrid models like Grand Vitara, Toyota HyRyder and Honda City Hybrid.
The top-end Alpha Plus DT Hybrid variant of the Grand Vitara is priced at Rs 20.09 lakh ex-showroom. This price includes 28 percent GST and 15 percent CESS. If the GST is reduced to 12 percent, the ex-showroom price of the car would also come down. The costs ex works for The Grand Vitara will cost around Rs 11.45 lakh. Adding 12 per cent GST and 15 per cent CESS, the new ex-showroom price is Rs 14.54 lakh, a difference of almost Rs 5.5 lakh.
The Toyota Hyryder, whose price is similar to the Grand Vitarawill also see a comparable price reduction. We can expect a price drop of Rs 5-6 lakh. The last car discussed in this article is the Honda City Hybrid. The top-end ZX-CVT hybrid variant of the City costs Rs 20.39 lakh ex-showroom, making it more expensive than the Grand Vitara.
After the 28 per cent reduction in GST and CESS, the ex-factory price of the City Hybrid is Rs 14.37 lakh. If you add the 12 percent GST and 15 percent CESS, the amount would be around Rs 18.25 lakh. Even then, there is a significant price difference ex-showroom, which is also reflected in the street price.
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