Import Duty on Electric Vehicle Parts to be Increased to 15 Per cent From April 2020

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The Indian Government is eyeing to promote mass adoption of electric vehicles (EVs) through schemes like FAME II to be rolled out from April.

As part of its effort to promote domestic manufacturing of electric vehicles, the government has decided to increase the basic customs duty on parts of electric passenger vehicles to 15 per cent from April 2020 and 10 per cent on imported lithium-ion cells by April 2021.

In this regard, the government has issued a notification, which also entails doubling the basic customs duty on completely built units of electric buses and trucks to 50 per cent from April 2020.

As reported by PTI, at present, the basic import duty on completely knock-down kits used in electric buses, passenger EVs, electric two-wheelers, three-wheelers and electric trucks is 10 per cent, which will be raised to 15 per cent from April 2020.

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Basic customs duty on parts used in manufacturing electric vehicles (EVs) like AC or DC charger, motor and motor controller; power control unit, among others, will also be increased to 15 per cent from nil at present starting from April 2021.

The basic import duty on battery packs used in manufacturing electric vehicles will also be increased to 15 per cent from the current 5 per cent from April 2021, the news agency reported.

In the notification, the heavy industries ministry also said that the basic import duty on lithium ion cells used in manufacturing of lithium ion accumulator for EVs will be doubled to 10 per cent from April 2021.

Promotion of indigenous manufacturing of electric vehicles

The Indian Government is eyeing to promote mass adoption of electric vehicles (EVs) through schemes like FAME II to be rolled out from April.

The notification is part of the road map under the phased manufacturing programme (PMP), which was initiated for the promotion of indigenous manufacturing of electric vehicles, its assemblies and parts or inputs of the sub-assemblies through graded duty structure over a period of time.

The intention is to substantially increase value addition and capacity building within the country, the report noted.

“The PMP shall enable the manufacturers in the sector to plan their investments for establishment of a robust indigenous electric vehicles and related sub-assembly/ components manufacturing base in India,” the heavy industries ministry said in the notification.

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