Electric Vehicles Budget 2020
Finance Minister Nirmala Sitharaman presented her second union budget with an aim to revive the economy and speed up growth amid global slowdown. One sector among various that experienced a slowdown during the sluggish economy has been the auto sector which was hoping some kind of relief, especially in the electric vehicles segment. Here's a quick guide as to what Budget 2020 has brought for the Electric Vehicles makers and consumers.
Key takeaways from Budget 2020: What's for Electric Vehicles (EVs) industry
- Imported electric vehicles are set to become costlier as Finance Minister Sitharaman announced an increase in customs duty on various kinds of such vehicles as the government pushes to promote local production.
- Under 'Make in India' initiative, well laid-out customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components.
- To push local manufacturing in the EV segment, govt has increased customs duty on imported completely built units (CBUs) of commercial EVs to 40 per cent with effect from April 1, 2020, from 25 per cent currently.
- Sitharaman also proposed to enhance customs duty on semi knocked-down (SKD) forms of passenger EVs from 15 per cent to 30 per cent.
- Also, the government has proposed to hike customs duty on SKD forms of electric buses, trucks and two-wheelers to 25 per cent from 15 per cent currently, with effect from April 1, 2020.
- Besides, the customs duty on completely knocked-down (CKD) forms of passenger EVs, three-wheelers, two-wheelers, bus and trucks has been proposed to go up to 15 per cent from the current 10 per cent.
- Sitharaman also proposed to increase customs duty on CBUs of traditional commercial vehicles from 30 per cent to 40 per cent.
- The government also proposed to increase customs duty from 5 per cent to 7.5 per cent on parts used to manufacture catalytic converters.
Companies like Mercedes-Benz, Audi and JLR are also gearing up to introduce electric models in the country. With enhanced customs duty on SKD forms, such vehicles are expected to cost more.
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