At the 2023 budget session, the tax on imported cars is reduced, resulting in a price drop for cars coming to our shores via the CBU (Completely Built Unit) routes. Well, a host of brands, like Range Rover, Mercedes-Benz, Volkswagen, Skoda, Audi, Porsche, BMW and more import their cars to India in CBU form. With the new taxation norm, a cut in the prices of such models will be seen. Also, the Finance Minister Nirmala Sitharaman announced that the subsidies on Electric Vehicle batteries will be extended for 1 more year, hence making EVs cheaper in India. “I propose to continue the concessional duty on lithium-ion cells for batteries for another year”, said FM Nirmala Sitharaman FM Nirmala Sitharaman.
In May 2021, govt launched the Production Linked Incentive (PLI) scheme for manufacturing batteries. Govt has also doubled the funds in the FAME scheme. The PLI scheme was aimed to bring down prices of this core key component of electric vehicles. The Goods and Services Tax (GST) on sale of electric vehicles was reduced from 12% to 5%.
Commenting on this, Samrath Kochar, Founder & CEO of Trontek, India’s largest Li-ion battery manufacturer, said, “The budget is pragmatic and has taken the right steps towards advancing green mobility adoption in the country. Extension of customs duty exemption on Li-ion cells and removal of customs duty on imported machinery used for manufacturing Li-ion batteries will bring down the cost of EV batteries thereby reducing the cost of EV adoption. Going forward, we are certain that the Government will also look at bringing a PLI scheme for battery pack manufacturers and also reduce GST on batteries to benefit the many MSMEs operating in the EV sector.”
Also, in a bid to curb pollution caused by ageing vehicles, the government has announced to assist states in replacing old vehicles under the vehicle scrapping policy. In a bid to curb pollution caused by ageing vehicles, the government has announced to assist states in replacing old vehicles under the vehicle scrapping policy. This came out during the budget session, which is being presented by Nirmala Sitharaman, Finance Minister of India.
The statement reads, “Replacing old polluting vehicles is an important part of greening our economy. In furtherance of the vehicle scrapping policy mentioned in Budget 2021-22, I have allocated adequate funds to scrap old vehicles of the Central Government. States will also be supported in replacing old vehicles and ambulances.”