According to Reuters report, electric vehicle (EV) Import tax can be reduced from 100% to 15%. Apart from this, it is believed that EV import tax can be reduced on some of the cars of foreign brands.
Citing an official, the Reuters report further said that the government is movin slowly in considering the policy proposal as any lowering of taxes on imported EVs could disrupt the market and upset local players like Tata and Mahindra that are investing to build electric cars locally in India.
The policy, which is still in the initial stages, could allow automakers to import fully-built EVs into India at a reduced tax as low as 15%, compared to the current 100% that applies to electric cars which cost above $40,000 and 70% for the rest, said the report citing two of its sources, including a senior Indian government official.
However, Finance Minister Nirmala Sitarama has denied the report, and told reporters "there is no proposal in front of me" to reduce import duties on electric vehicles.
This policy is said to be a 'push' to bring Tesla to India. To recall, just after Prime Minister Narendra Modi's US tour and a meeting with Elon Musk, India had rejected China's $1 billion offer to set up EV manufacturing plant in India.
In an another report by CNBC Voice, the Government of India is working on a new "Electric Vehicle Policy". The policy is being prepared keeping in mind the proposal of Tesla, in which the government can give tax exemption to the imported car of some of the companies. This policy is also being made keeping in mind the companies which plan to plant in India or to promote "Make in India" Initiative of Government of India.
It is to be noted that currently 100% tax applies to cars that cost more than $40,000. At the same time, cars of lower price are taxed at 70%. Tesla is projected to benefit the most from this new policy. To recall, Tesla has recently proposed to set up plants for the production of electric cars in the country. Currently, Tesla's most popular car Model Y is priced at $47,740 in the US. After the implementation of the new policy, only 15% of Tesla car will be taxed in India.
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