Toyota Innova Hycross is now available at a reduced price of Rs 3 lakh.

To promote the use of eco-friendly transportation, the Government of Uttar Pradesh has announced a complete waiver of registration tax on hybrid cars. Uttar Pradesh joins Chandigarh in providing subsidies for hybrid vehicles. This new rule will impact popular models such as the Honda City, Toyota Innova Hycross, Maruti Invicto, Toyota Urban Cruiser Hyryder, Maruti Grand Vitara, and Toyota Camry, among others. Let’s take a closer look at the details of the new hybrid tax exemption rule.

Uttar Pradesh Hybrid Tax Exemption: Benefits of up to Rs 3 lakh

Previously, Nitin Gadkari, Minister of Road Transport and Highways, had recommended a change in the tax structure for hybrid vehicles. He proposed that the GST on hybrid cars be reduced from 28 percent to 12 percent. This reduction would have led to a substantial discount of up to Rs 7 lakh on popular models such as the Innova Hycross and Maruti Grand Vitara, among others.

While this suggestion was struck down by the Ministry of Finance, the Uttar Pradesh government has announced a state-level subsidy on the registration of hybrid vehicles. As part of its 2022 EV policy, the state government had waived registration fees for electric vehicles. Now this subsidy has been extended to include hybrid vehicles.

Initially, the government has included all models from Rs 10 lakh to Rs 1 crore for this rebate but expect amendments to be introduced in due course. The new tax reduction applies to all models registered until October 2025. Previously the registration charge on any vehicle (petrol/diesel/hybrid) costing above Rs 10 lakh was capped at 10 percent.

Savings on popular models: