Hybrid makers face tax dilemma

Hybrid car assemblers are now in a quandary as the government increased the general sales tax (GST) to 25 per cent from 8.5pcin the new budget. As a direct consequence, the price of locally made hybrid vehicles is projected to surge, with some models potentially increasing by up to Rs1.4 million to over Rs2.2mn after the GST hike. Sources said that the assemblers of these vehicles were surprised to receive this GST shock on locally produced vehicles in the budget. However, the government favoured them by abolishing customs duty on the import of hybrid cars and luxury electric vehicles (EVs) to promote the local industry. An auto assembler who asked not to be named said that jacking up the GST seems like a fair move since these expensive vehicles are bought by rich people who can pay tax.