Centre wants Tesla to first start production in India before any tax concession – EQ Mag Pro
At present, cars imported as completely built units attract customs duty ranging from 60% to 100%, depending on engine size and cost, insurance and freight value less or above $40,000
New Delhi: The heavy industries ministry has asked US-based electric car major Tesla to first start manufacturing its electric vehicles in India before any tax concessions can be considered, government sources told PTI.
According to the sources, the government is not giving such concessions to any auto firm and giving duty benefits to Tesla will not send a good signal to other companies that have invested billions of dollars in India.
The electric car manufacturer has demanded reduction in import duties on electric vehicles (EVs) in India.
Tesla’s call for a tax cut on imported EVs has received a mixed reception. Volkswagen AG’s India unit and Hyundai Motor India Ltd have backed the move while Mahindra & Mahindra Ltd has called for a review of import tariffs along with lower domestic levies.
At present, cars imported as completely built units (CBUs) attract customs duty ranging from 60% to 100%, depending on engine size and cost, insurance and freight (CIF) value less or above $40,000.
In a letter to the road ministry, the US firm had stated that the effective import tariff of 110% on vehicles with customs value above $40,000 is “prohibitive” to zero-emission vehicles. It has requested the government to standardize the tariff on electric cars to 40% irrespective of the customs value, and withdraw the social welfare surcharge of 10% on electric cars.
Tesla said that these changes would boost the development of the Indian EV ecosystem and the company will make significant direct investments in sales, service, and charging infrastructure.
The company has argued that these proposals would not have any negative impact on the Indian automotive market as no Indian OEM currently produces a car (EV or ICE) with ex-factory price above $40,000 and only 1-2% of cars sold in India (EV or ICE) have ex-factory/customs value above $40,000.
Source: ETtech
