GST Refunds, Subsidies, Payroll Incentives - Tamil Nadu¡¯s Early Bird Offer For EV Players
The state of Tamil Nadu is planning to offer incentives to electric vehicle makers in order to increase EV adoption in India. The incentives to be offered will include GST refunds subsidies as well as incentives based on payrolls for the next 3 to 5 years. The state is also encouraging buyers to opt for an EV and might soon waive off road tax on such vehicles.
The state of Tamil Nadu is planning to offer incentives to electric vehicle makers in order to increase EV adoption in India. The incentives to be offered will include GST refunds, subsidies as well as incentives based on payrolls for the next 3 to 5 years and are aimed at attracting such OEMs to the state to set up their plants.
As per an ET report, investors in the EV space in the state will be able to avail their choice of incentive from the ones mentioned above. The report cites an official associated with the report saying ¡°On offer are special benefits for industries that come to Tamil Nadu within the first 3-5 years, a kind of an early-bird package.¡±
This is not the first time that the state is making efforts to establish an industrial setup in the region. In the 1990s, Tamil Nadu had managed to attract manufacturers like BMW, Hyundai, Ford, Daimler and Nissan by offering value-added tax refund policies at the time.
This time, the idea is to build a similar ecosystem for the EV industry. For this, the never-seen before incentives are being extended to EV manufacturers even at a much lower slab. In fact, the capital subsidy planned for the EV industry is more than what the state govt is offering to the conventional automobile manufacturers. It further rises for those involved in making battery packs, as per another official cited in the report.
(Representative Image: Reuters)
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As of now, the draft policy is under consideration by the finance department and is expected to be finalised by the end of this month.
In addition to attracting the manufacturers, the state is also encouraging buyers to opt for an EV and might soon waive off road tax on such vehicles.
Industry reaction
Chennai is already the manufacturing hub for Hyundai¡¯s Kona, India¡¯s first all-electric SUV. More such players are finding it in their benefit to setup plants in the state for EV production, including several EV startups like Srivaru Motors.
The state government wants to propel the interest even further. It is planning to develop two electric vehicle parks reportedly near Chennai and Hosur as well as incubation centres. These are to enable EV vendors and manufacturers to work together through a common infrastructure, while also boosting EV startups by giving them adequate setup and funds.
ION Energy, a battery management and intelligence platform comments on this - "TN¡¯s slew of special sops and incentives is a novel move. It will be a massive push for EV makers in the southern state, and could also potentially attract early investors to make the all-electric transition faster."
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