PVs' GST Rate Outdated, Needs Review: JSW MG CEO Emeritus
ECONOMY & POLICY

PVs' GST Rate Outdated, Needs Review: JSW MG CEO Emeritus

JSW MG Motor India CEO Emeritus Rajeev Chaba emphasized that the current GST rate structure for passenger vehicles in India needs to be updated to align with new developments in the auto industry. He suggested that the government should consider several factors such as vehicular emissions, reducing the import bill, establishing a sustainable local supply chain, and minimizing total cost of ownership while formulating policies for the auto sector.

Regarding speculations about tax incentives for hybrid vehicles ahead of the Union Budget, he stated that only strong 'plug-in' hybrids, capable of operating as battery electric vehicles independently from internal combustion engines, should qualify for such benefits.

Chaba commented, "Earlier, we used to define the size of the car as sub-four meters and based GST structure on engine sizes like 1.2 litres or 1.5 litres. I think those days are over," indicating a need for a revision in policy.

Currently, electric vehicles (EVs) attract a GST rate of 5 per cent, hydrogen fuel cell vehicles 12 per cent, and smaller passenger vehicles with petrol, CNG, or LPG engines up to 4 metres in length and up to 1,200 cc engine size are taxed at 28 per cent with a 1 per cent compensation cess.

Diesel passenger vehicles up to 4 meters in length and up to 1,500 cc engine size face a GST rate of 28 per cent with 3 per cent cess. Larger petrol and diesel vehicles are taxed at 28 per cent with higher cess percentages based on engine size and vehicle type.

Chaba proposed that GST rates should prioritize environmental friendliness, technology's potential to save on import costs, local manufacturing capabilities, and low total cost of ownership. He suggested, "The policy should be based on these considerations. If EVs are deemed the best option, they should have a 5 per cent GST rate. If CNG proves advantageous, it should be preferred over petrol and diesel."

He added, "Strong hybrids should be prioritized over conventional fuels, and EVs should be encouraged as the optimal choice."

Acknowledging potential industry disagreements, Chaba emphasised that a focused policy approach would enable OEMs to concentrate on their chosen technology platforms.

JSW MG Motor India CEO Emeritus Rajeev Chaba emphasized that the current GST rate structure for passenger vehicles in India needs to be updated to align with new developments in the auto industry. He suggested that the government should consider several factors such as vehicular emissions, reducing the import bill, establishing a sustainable local supply chain, and minimizing total cost of ownership while formulating policies for the auto sector. Regarding speculations about tax incentives for hybrid vehicles ahead of the Union Budget, he stated that only strong 'plug-in' hybrids, capable of operating as battery electric vehicles independently from internal combustion engines, should qualify for such benefits. Chaba commented, Earlier, we used to define the size of the car as sub-four meters and based GST structure on engine sizes like 1.2 litres or 1.5 litres. I think those days are over, indicating a need for a revision in policy. Currently, electric vehicles (EVs) attract a GST rate of 5 per cent, hydrogen fuel cell vehicles 12 per cent, and smaller passenger vehicles with petrol, CNG, or LPG engines up to 4 metres in length and up to 1,200 cc engine size are taxed at 28 per cent with a 1 per cent compensation cess. Diesel passenger vehicles up to 4 meters in length and up to 1,500 cc engine size face a GST rate of 28 per cent with 3 per cent cess. Larger petrol and diesel vehicles are taxed at 28 per cent with higher cess percentages based on engine size and vehicle type. Chaba proposed that GST rates should prioritize environmental friendliness, technology's potential to save on import costs, local manufacturing capabilities, and low total cost of ownership. He suggested, The policy should be based on these considerations. If EVs are deemed the best option, they should have a 5 per cent GST rate. If CNG proves advantageous, it should be preferred over petrol and diesel. He added, Strong hybrids should be prioritized over conventional fuels, and EVs should be encouraged as the optimal choice. Acknowledging potential industry disagreements, Chaba emphasised that a focused policy approach would enable OEMs to concentrate on their chosen technology platforms.

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code