Toyota Innova HyCross Hybrid Taxed More Than 2 Crore BMW: Check This Out [Video]

Electric vehicles have been enjoying an unfair advantage in taxation for long. Lower slabs have contributed well to their adoption and, to be honest, in people shifting away from ICE and hybrid vehicles. The more practical hybrids are conveniently exempted from lower tax, leading to awkward pricing disparities between them and the EVs. A recent analysis of tax paid on two popular car models belonging to extremely far-fetched segments has given out shocking data. A top-spec Toyota Hycross Hybrid is taxed more than a 2 Cr BMW i7! Let’s delve into the details.

India levies heavy taxes on automotive purchases. The slabs here could sound bizarre when compared to those in other countries. In many cases, we end up paying almost double the actual price of whatever we buy. For example, if we were to buy a Mahindra Thar, the actual price of which is 11.65 lakh, we would end up paying 14% GST to both the central and state governments. This means a total of 28% in GST alone. This could amount to 3.26 lakh in this case. In addition to these, 20% CESS, Road Tax, 1% TCS and insurance also need to be paid. The total cost then would be around 20 lakh, almost double the actual worth.

Now, that was for the regular petrol and diesel vehicles. It would be logical to assume that hybrids could have lower slabs due to their green nature, especially when EVs enjoy the huge privilege of having a tiny 5% GST. However, the truth is just the opposite. Hybrid cars are taxed at 43%. This is quite close to the slabs for regular petrol cars. Not many discounts or benefits apply to them in most states. They continue to be pricey and less prone to early adoptions.

For electric vehicles, on the other hand, the GST is just around 5%. Various states also offer special subsidies and schemes as well. Lower tax lets manufacturers price EVs attractively. However, with the recent revision in the FAME scheme, whereby it got renamed to PM E-Drive, EV subsidies have been removed almost completely. This will have an impact on electric car prices, but since the GST continues to hold at 5%, the net impact would be bearable.

Now consider the case of Toyota Hycross Hybrid and BMW i7. The top-spec Hycross costs ₹20.65 lakh before taxes. The on-road price can go up to 35.55 lakh, in some cities. A GST of 43% (8.88 lakh), road tax of 22% (4.5 lakh), and insurance will all have to be paid.

The i7 is BMW’s flagship electric sedan based on the 7 series. It is priced at ₹2.38 Cr, ex-showroom. Courtesy of its all-electric nature, the i7 enjoys the 5% GST privilege. This means that the government will levy just 11.9 lakh from each i7 worth over 2 crores! Sources say that customizations and upgrades for these ultra-luxury cars also fall under the 5% tab. Imagine buying Mag wheels for your i7, and paying as little as 5% in GST… Lucrative right?

Changes Incoming?

The government of India has been actively trying to make things easier for hybrids. Lately, EV sales in India have been on the decline and an increased acceptance is being observed for hybrids. Many manufacturers are coming up with improved hybrid technologies like series hybrids. Some of them have reportedly been lobbying the government to make things easier for these vehicles.

To pave the way for these, various policy amendments are being considered. The UP government has already rolled out a 100% tax waiver on hybrid vehicles, to boost the adoption rate. We could soon see other states doing the same as well. Union Minister Nitin Gadkari had previously hinted that hybrids could become a lot cheaper in the future. He is likely working towards making it happen too…