Govt mulls tax incentives for electric vehicle purchase
Looking to invest in mutual funds or fixed deposits to save tax? Why not buy an electric car instead? Sumant Banerji writes.autos Updated: Apr 05, 2012 23:43 IST
Looking to invest in mutual funds or fixed deposits to save tax? Why not buy an electric car instead?
"The rational is that every consumer who shifts from a petrol or diesel to an electric vehicle helps the state by not using imported fuel. Hence we may reward them by offering a time-bound tax rebate," the official said. "We are also looking at other benefits like lower interest rates (on loans) and toll exemption on national highways."
The government is looking at a host of options to encourage use of electric vehicles in India, a finance ministry official said.
A broad policy framework for electric vehicles is being prepared by National Council for Electric Mobility, set up last year, and is expected this month. At present, a direct cash subsidy of 20% is provided on purchase of for all electric cars and two-wheelers. Additionally, state governments give their own incentives such as exemption from sales tax and VAT. However, only one company —Mahindra Reva — makes electric cars in the country.
“Obviously the industry is waiting for a specific policy framework,” the official said. “Various countries subsidise electric vehicles, and we are studying them. More cash incentives is difficult but a tax rebate on the lines of Belgium is possible.”
The Belgian government offers tax deduction of upto 30% including VAT on purchase of a new electric vehicle.