Electric car makers want excise back | autos | Hindustan Times
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Electric car makers want excise back

At a time when other industries are asking for tax cuts and fiscal incentives, the domestic electric vehicle industry has a rather unique demand. The industry wants the government to re-introduce excise duties waived off last year.

autos Updated: Jun 12, 2009 23:35 IST
Sumant Banerji

At a time when other industries are asking for tax cuts and fiscal incentives, the domestic electric vehicle industry has a rather unique demand. The industry wants the government to re-introduce excise duties waived off last year.

“The waiving off of excise duties for electric vehicles last year was done with right intentions but it created a peculiar problem for us," said Sohinder Gill, director-general, corporate affairs, Society of Manufacturers of Electric Vehicles (SMEV). “While excise duties became zero, import duty for components remained at 10 per cent, resulting in CENVAT, which could not be utilised. Hence vehicle prices actually went up,” Gill, who is also the CEO of Hero Electric, added.

The industry has now asked the government to impose 2 per cent excise duty to enable it to get a refund of the duty it pays on components. Due to low volumes of electric vehicles, the industry is not able to manufacture critical components like battery and motor.

The industry also wants 25 per cent direct subsidy for the purchase of electric vehicles and a reduction in value-added tax (VAT) from 12 to 4 per cent.

It also wants India to study the Chinese model. “China sells 20 million electric vehicles in a year. We can surely learn from them,” said Lajpat Rai, assistant vice-president, Reva Electric Car Company.

Globally, electric vehicles have been encouraged by various governments through a mix of subsidies and tax breaks.