Electric vehicle makers seek road tax exemption

Vijay C Roy

Tribune News Service

Chandigarh, July 12

As the adoption of electric vehicles is at nascent stage in the northern region, the industry has demanded exemption from road tax in Punjab and Haryana on the lines of Chandigarh and southern states. The manufacturers and dealers feel the move will go a long way in bringing down the acquisition cost. In Punjab and Haryana, road tax on electric vehicles is charged at 7% and 6%, respectively.

The Ministry of Road Transport and Highways has already proposed to do away with registration fees for electric vehicles (EVs) to create an ecosystem to enable the adoption of such vehicles. The ministry plans to convince the state governments to either waive or reduce the road tax to promote green vehicles.

“Few southern states are offering zero road tax on electric vehicles besides free parking and exemption from toll tax and also free permits to commercial vehicles. If the same incentives are extended in North, the demand for electric vehicles will definitely go up,” said Sanjay Dahuja, managing director, Berkeley Hyundai, Chandigarh.

The industry feels the real big difference will be felt when all the states reduce or end the road tax on electric vehicles. Currently, about half a dozen states, including Maharashtra, Karnataka, Rajasthan Uttarakhand, Andhra Pradesh and Kerala, don’t levy any road tax while registering electric vehicles. In other states, the road tax for electric vehicles is between 4% and 10%. The exemption in road tax can result in huge savings to buyers of electric vehicles.

“It has come to our notice that some of the state governments are also planning to offer similar kind of incentives. Like Delhi, in its draft policy, it has already mentioned that electric vehicles will be exempted from road tax,” said Alok Ray, Director-Operations, Society of Manufacturers of Electric Vehicles (SMEV).

Taking a cue from southern states who were early movers in launching Electric Vehicle (EV) Policy incentives, the northern states such as Punjab and Haryana are also looking to work on dedicated EV Policy. Punjab has invited industry stakeholders to contribute in framing the policy. Haryana is also planning to launch the EV Policy.

Recently, in a bid to push the sale of EVs in the country, Finance Minister Nirmala Sitharaman in the Budget had recommended reducing the GST on electric vehicles from the current 12% to 5%.  In addition to this, she also announced that there will be an income tax rebate of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. The Union Budget also included the proposal for customs duty exemption on import of specific components.

Besides this, the industry feels that there is a dire need of requisite infrastructure such as charging stations to propel the demand of electric vehicles in the country.

Out of 56,000 electric vehicles sold in the country in 2017-18, only 2% were four-wheelers.