India Preparing For The Future, May Soon Cut Import Duty On Electric Vehicle Parts
Heavy Industries Ministry has proposed to the Department of Revenue that the customs duty on parts of electric vehicles EV should be reduced. The proposal falls in line with the government&rsquos 2023 EV mission and further suggests that semi knocked down and completely knocked down kits used for assembling EVs should be defined.
Slowly but gradually, Indian authorities are making efforts to embrace the electric vehicle culture in India. Building on this, the Heavy Industries Ministry has now proposed to the Department of Revenue that the customs duty on parts of electric vehicles (EV) which currently attract import tariff should be reduced.
The proposal falls in line with the government¡¯s 2023 EV mission and further suggests that semi knocked down and completely knocked down kits used for assembling EVs should be defined for appropriate customs duty.
"We have proposed a definition for completely knocked down (CKDs) and semi knocked down (SKDs) kits for EVs along with a tax structure conducive to increasing their presence on Indian roads. However, we will not touch the parts attracting zero percent duty," a senior government official told PTI.
Currently, zero customs duty is applied on the crucial parts of EVs including battery, charger, converter, controller, energy monitor, electric compressor and motor. While 28 percent basic customs duty is applied on parts including metals and plastics.
Reuters
Heavy Industries Ministry proposed a revised tax structure entailing a one-year sunset clause to the Finance Ministry last week. The proposal is expected to be introduced alongside Rs 5,500 crore FAME India scheme that entails subsidies for electric vehicles, strong hybrid cars and for charging infrastructure.
Back in September, Heavy Industries Ministry had come up with the blueprint for the second phase of FAME India scheme. Consecutively, it got Rs 5,500 crore sanctioned from the expenditure finance committee (EFC) under the Finance Ministry.
Meanwhile, the Prime Minister's Office is trying to push these incentives for domestic manufacturing of lithium-ion batteries, thus reducing their import and hence dependence from China.
