April 16: Toyota Kirloskar Motor, India’s fourth largest auto manufacturer, has urged for a revision of tax policy so as to help the proliferation of eco-friendly vehicles in the country. The company has opined that taxation should be carried out on the basis of emission levels rather than on engine capacity, size or ground clearance to help the green segment gain a foothold in the market.
The company has also sought for a reduction in tax rate on eco-friendly vehicles to encourage companies in bringing more models with newer technology to the country.
“What we want is a stable government policy on fuels, where tax is according to carbon neutrality. It means that the emission levels of each car need to be measured and tax needs to be levied on that basis,” TKM Vice Chairman and Whole-Time Director Shekar Viswanathan was quoted as telling a news source.
He although concerned that the industry would have split opinion over the issue due to variation of impact of policies over manufacturers. The Department of Heavy Industries has already floated a paper regarding the matter and is currently seeking industry opinion for taking further action.
According to the current taxation policy, passenger vehicles are tagged under the GST slab of 28 percent. In addition to that, the vehicles are also levied with cess that ranges from 1 percent for sub-4 meter vehicles to 22 percent on big SUVs with length greater than 4 meter. At present, hybrid passenger vehicles attract cess of 15% over the GST rate.
Toyota Kirloskar also said that the company is hoping to add more hybrid vehicles to its exiting roster, which has Camry Hybrid as the solo player. Toyota has over 34 hybrid vehicles in the global market, while it still sells only one model in India due to ‘punitive taxation’. Vishwanathan was quoted as saying that the government has started heeding to the demands, educating themselves in different kinds of technology.
Speaking of the growth expectations of the company in the current fiscal, Viswanathan said that the company was focusing on improving the plant capacity utilization. He added that the company’s second plant was using only less than 50 percent of its capacity. The company is also eyeing introduction of new models in the BS-VI range and increase in volumes owing to the demand.