Carmakers want 5% GST, income tax sops to push e-vehicles

download (1) Carmakers have sought a number of incentives to push electric vehicles — a 5 percent goods and services tax (GST), income tax (I-T) benefits, waiver on road tax and toll charges, free parking, and a 50 percent reduction in power tariff for charging these vehicles.

The domestic automobile industry, which has slowly but surely started taking small steps towards electric mobility, has said it will take another thirty years to achieve hundred per cent electrification in new sales. In a white paper submitted to the government, industry body Siam said by 2047, it aims to convert all new vehicle sales to electric. The government had been talking about an ambitious deadline of 2030 for moving all new vehicle sales to electric.

Siam has submitted a white paper on electric vehicles to the government indicating that a hundred percent shift to electric mobility in public transport is possible by 2030, by when forty percent of new personal vehicle sales will also be electric. Former power minister Piyush Goyal had in April this year said: “The idea is that by 2030, not a single petrol or diesel car should be sold in the country.”

“To ensure smooth phasing in of pure electric vehicles and to sustain the transition to cleaner fossil fuel vehicles, the internal combustion engine upgradation must continue over the next decade or so. Progressively cleaner fossil fuel vehicles would be an essential stepping stone in this journey towards hundred percent electric vehicle regime,” Siam said. The white paper comes at a time when the government is working on an electric vehicle policy.

Pure electric vehicle penetration currently remains quite low in India, 0.1 per cent in passenger vehicles, 0.2 per cent in 2 wheelers and practically nil for commercial vehicles due to several reasons including significant affordability gap and low level of consumers’ acceptance, low level of electric vehicle manufacturing activities and non-existent public charging infrastructure etc.

The industry wants incentives to make electric vehicles affordable and kick-start the process of conversion. Siam has sought a five per cent GST for electric vehicles against the current twelve per cent. A complete waiver of road tax has also been suggested. It has also talked about a priority sector lending rate for electric vehicles. Siam wants an income tax deduction of 30 per cent of vehicle price from total taxable income in case individual purchasers not taking a bank loan.

A maximum vehicle price of Rs 25 lakh is suggested for this. For individuals availing finance, income tax deduction of up to Rs 1 lakh on the interest component for loans taken may be given every year during the tenure of the loan, Siam said. An accelerated depreciation benefit of 40 per cent is sought besides a fifty per cent reduction in power tariff for electricity used to charge these vehicles. The industry also wants a full exemption of toll charges on these vehicles.
Many automobile manufacturers and auto component manufacturers in India have launched or announced their plans to develop electric vehicles and related components. Besides M&M, which has been making electric cars for last few years, Tata Motors has also entered the space. Maruti’s parent, Suzuki, has tied up with Toyota to roll out electric cars in India by 2020. Hyundai is also said to be working on electric cars. Two-wheeler makers like Hero MotoCorp and TVS Motor also have projects for electric vehicles.



Source: Business Standard


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