Govt lays out terms before weighing Tesla’s tax demands

NEW DELHI: The government has asked Tesla Inc. to ramp up local procurement and share detailed manufacturing plans before the carmaker’s demands for lower taxes on electric vehicles are considered, a person with the knowledge of the matter said.

The ministries of heavy industries and finance sought the details from Tesla in a meeting earlier this month even as the government examines billionaire Elon Musk’s demand for lower taxes on EVS in Asia’s third-largest economy, the person said, asking not to be identified because the discussions are private.

The departments have also asked Tesla for its thoughts on importing fully built cars versus so-called knocked-down units or partially built vehicles, which attract a lower import levy, the person said.

Tesla didn’t respond to requests for comment. Representatives from the ministry of heavy industries and the ministry of finance couldn’t immediately be reached for comment.

Tesla wrote to the government in July asking for the import duty on electric cars to be reduced to 40% from the current 60% to 100%.

The company also asked for the 10% social welfare surcharge—which is levied on all imported cars and helps fund health and education programs—to be scrapped.

At the meeting, Tesla claimed it has procured components worth $100 million so far from India and suggested that figure would increase following any tax concessions, the person said.