Tesla may get partial customs duty relief from India

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Electric vehicle maker Tesla could get a partial customs duty relief from India, provided they submit the detailed plans for investment in the country, The Economic Times, reported on August 31. The publication on July 27 had reported that the government was open to lowering import duty on electric vehicles, if the company gives an assurance about starting manufacturing in the country. The country’s present customs duty regime does not differentiate between electric cars and those that run on traditional fuels. Higher duties have been imposed to encourage local manufacturing.

The company’s demand for a reduction in import duty are being considered by the stakeholder ministries.

Tesla wants its cars to be treated as electric vehicles

On fully assembled electric vehicles priced below $40,000, the company has sought for a 40% import duty against the current rate of 60% and 100% on those above that threshold. Tesla wants its cars to be treated as electric vehicles and not luxury cars. In a letter to various government ministries and departments, the company has flagged these issues.

Also, GST on electric vehicles has been reduced from 12% to 5%. While GST on Charging stations and chargers have been cut to 5% from 18%. To enable purchase of electric vehicles, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme provides incentive through an upfront reduction in price.