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VAT on electric and hybrid vehicles reduced by the Delhi Government

VAT on electric and hybrid vehicles reduced by the Delhi Government
Nikhil Puthran Nikhil Puthran Saturday 14 May 2016, 11:24 AM

Taking a positive step toward reducing air pollution in the city, the Delhi Government has reduced the Value Added Tax (VAT) on hybrid cars, battery-operated vehicles and e-rickshaws from 12.5 per cent to 5 per cent. The government terms it as a step towards making the VAT rates the lowest in the country in Delhi. The reduction has been one of the measures that was announced in the 2016-17 budget.

An official statement in this regard reads, “This step apart from promoting eco-friendly vehicles to reduce pollution in the city will also bring relief to a large number of entrepreneurs earning their livelihood by plying e-rickshaws. It is expected that a large number of consumers will shift from petrol or diesel vehicles to hybrid vehicles.”

Adding further, the statement said, “It is expected that reduced rate of VAT will lead to better tax compliance. People should insist on taking bill having TIN number on each and every purchase and upload the bills through DVAT Bill App.” The decision will also help generate more interest among potential customers who until now had been hesitant to opt for hybrids or electric vehicles due to high VAT charges.


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