Aiming to make India a global manufacturing hub for electric vehicles, finance minister Nirmala Sitharaman in her maiden Budget speech announced a slew of measures to boost the adoption of EVs. From reducing the GST rate on EVs from 12 percent to 5 percent to tax incentives for EV buyers, here's all that the FM announced on EVs:
FAME II scheme
The FM said the centre has already approved Rs 10,000 crore for phase II of FAME scheme on April 1, 2019, to provide right incentives and charging infrastructure, which in turn will help in faster adoption of EVs.
"Only advanced battery and registered e-vehicles will be incentivised under the scheme with greater emphasis on providing affordable & environment-friendly public transportation options for the common man," she said.
Lowering of GST rate
The FM said that the centre has already moved GST council to lower the GST rate on electric vehicles from 12 percent to 5 percent.
Incentives for EV buyers
In order to move consumers' interest towards EVs, the government has decided to make the eco-friendly vehicles affordable. The government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to buy these vehicles.
"This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase an electric vehicle," said the FM.
Additional duty on petrol and diesel
The government will charge a special additional excise duty of Rs 2 per litre on petrol and diesel. Of the Rs 2 hike, the road infra cess of Re 1 will go to the road ministry for infrastructure while the special duty of Re 1 will go to the revenue department. This might act as a fresh incentive towards the adoption of alternative fuels.
Other measures
Further, to incentivise e-mobility, customs duty is being exempted on some EV parts.
First Published: Jul 6, 2019 10:34 AM IST
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