Earlier this month, the Uttar Pradesh (UP) government took a major step by eliminating the registration fee entirely for strong hybrid and plug-in hybrid vehicles. The initiative aims to promote cleaner transportation and boost the use of eco-friendly vehicles. However, there’s a twist now: this tax relief might not cover all hybrid models.
The Toyota Innova HyCross and Maruti Invicto, two well-known hybrid MPVs, might not qualify for the tax exemption. The state authorities will provide a detailed announcement soon, declaring which hybrid vehicles will qualify for this incentive. However, it’s most likely that these two models may not feature on the list of approved vehicles.
The tax incentive follows the rules of the FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) subsidy program.
What does the FAME II guideline say?
As per these rules, electric or hybrid vehicles priced above ₹20 lakh are ineligible for the subsidy. The latest announcement, which waives the registration fee for hybrid vehicles, is part of this program.
If the state government issues new rules for getting tax benefits for hybrid vehicles following FAME II regulations, models like the Innova HyCross and Maruti Invicto will be excluded. However, cars like the Toyota HyRyder SUV, Maruti Grand Vitara, and Honda City Hybrid are likely to gain from the tax exemption.
For prospective buyers, the clarification is essential, as it directly affects the on-road prices of these hybrid vehicles.
Is There Tax Benefits for Hybrid Cars?
On July 5, the UP government declared that hybrid vehicles in the state would not have to pay registration tax. However, this move was made during an ongoing discussion about lowering GST on hybrid cars nationwide. Currently, EVs in India face a tax rate of just 5 percent, while hybrid vehicles are subject to 43 percent tax.
Nitin Gadkari, the Union Minister for Road Transport and Highways, also favors lowering taxes on hybrid vehicles. However, the central government has not made any decision on this matter so far. Union Minister Kumaraswamy mentioned the cabinet will review the issue, and the finance ministry will address it.
Remember that the tax exemption will remain effective until October 2025. If you are thinking about buying a hybrid vehicle in UP, stay alert for additional information on eligibility requirements.
