Govt is trying to make the electric vehicle deal sweeter

New Delhi: The government has cut import duty on components and parts of electric vehicles by 10 to 15 percent, in a bid to encourage domestic assembling of such vehicles. The Central Board of Indirect Taxes and Customs (CBIC) has established a separate category for electric vehicle components to lower the customs duty. The CBIC has also done away with customs duty exemption to battery packs for electric vehicles, while doubling the duty on battery packs for mobile phones.

Imports on battery packs for electrically-run vehicles will be taxed at 5 percent, while customs duty on battery packs for mobile phone has been doubled to 20 percent.  The CBIC added that the new charges on duties will come into effect from Wednesday.

"These customs duty rate rationalisations while may increase the cost of import of these goods, but should definitely boost the 'Make in India' initiative of the government," EY Tax Partner Abhishek Jain has said.

Drastic cut in customs

Previously, the customs duty on vehicle parts and components imported into the country was between 15 to 30 percent.

Last month, the Delhi government, in its push towards electrification of vehicles, introduced a draft policy on electric vehicles that also gives impetus to electric vehicle infrastructure in the city. Under this policy, electric cars would be free of registration charges and road tax, with the government set to install a charging station every 3 kilometres.