Ministry proposes import duty cuts on more EV parts

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.