Min­istry pro­poses im­port duty cuts on more EV parts

Financial Chronicle - - PLAN, POLICY - FC BU­REAU

THE heavy in­dus­tries min­istry has pro­posed re­duc­ing cus­toms duty on parts of elec­tric ve­hi­cles which are cur­rently not ex­empted from im­port tar­iff to the depart­ment of rev­enue, said se­nior of­fi­cials.

To boost pro­duc­tion of elec­tric ve­hi­cles (EVs) in the coun­try, the min­istry has also sug­gested defin­ing semi knocked down and com­pletely knocked down kits used for stream­lin­ing of cus­toms duty.

At present, key com­po­nents for EVs, in­clud­ing bat­tery, con­troller, charger, con­verter, en­ergy mon­i­tor, com­pres­sor and mo­tor, at­tract zero cus­toms duty. On the other hand, parts in­clud­ing me­tals and plas­tics at­tract 28 per cent ba­sic cus­toms duty.

“We have pro­posed a def­i­ni­tion for com­pletely knocked down and semi knocked down kits for EVs along with a tax struc­ture con­ducive to in­creas­ing their pres­ence on roads. How­ever, we will not touch the parts at­tract­ing zero per cent duty,” an of­fi­cial told PTI.

The tax struc­ture en­tail­ing a one-year sun­set clause was pro­posed by the heavy in­dus­tries min­istry to the fi­nance min­istry in a meet­ing last week and is likely to be in­tro­duced along with the Rs 5,500 crore FAME In­dia scheme en­tail­ing sub­si­dies for all cat­e­gories of elec­tric ve­hi­cles, strong hy­brid cars and for es­tab­lish­ing charg­ing in­fra­struc­ture.

The pol­icy to boost EV adop­tion will also en­tail a long-term road-map and vi­sion to en­cour­age do­mes­tic man­u­fac­tur­ing of lithium-ion bat­ter­ies.

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