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Union Budget 2019 – SIAM Welcomes Import Duty Cut on Electric Vehicle Components

Union Budget 2019 – SIAM Welcomes Import Duty Cut on Electric Vehicle Components

Snapshot: SIAM welcomes the Union Budget 2019 for the auto industry making a way for the upcoming Electric vehicles.

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With the Union Budget 2019 by Hon'ble Finance Minister, Piyush Goyal announced to reduce the import duty on CKD as well as SKD of electric vehicle (EV) components and central government's move has been welcomed by the Society of Indian Automobile Manufacturers (SIAM). As per the notification issued by the Central Board of Indirect Taxes and Customs (CBIC), the import duty on EV components has been lowered to 10 - 15 percent, compared to the previous import duty of 15 - 30 percent.

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The CBIC has also created a separate category for parts and components for EVs, where CBIC has removed customs duty exemption to battery packs for electric vehicles and the import of battery packs for EVs or hybrids is now 5 percent from zero percent. That means, owning an electric vehicle will be more expensive now, but this move comes to encourage cell manufacturing in the country and also to encourage the development of electric vehicle infrastructure.

During the Speech of Piyush Goyal, Minister of Finance, he also said, “Making India a pollution free nation with green Mother Earth and blue skies is the Third Dimension of our Vision. This India will drive on Electric Vehicles with Renewables becoming a major source of energy supply. India will lead the world in the transport revolution through electric vehicles and energy storage devices, bringing down import-dependence and ensuring energy security for our people.”
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Mr. Shekar Viswanathan, Vice Chairman & Whole-time Director – Toyota Kirloskar Motor, “The overall budget perspectives are positive covering wide spectrum of areas as health, skill, infrastructure, agriculture - as a big boost to the economy. The resource allocation across the budget has been thoughtful. The fiscal deficit at 3.4% of GDP reflects better economic stability with the impact on inflation outlook being relatively muted. As we see, the continuing path of fiscal incentives would be growth positive, accelerating the nation’s development. Further, the thrust on overall rural development will certainly accelerate the buying sentiments of the consumers and also the increased tax exemptions will enhance the disposable income of the people, thus contributing to the upliftment of the society with improved living conditions. The focus to strengthen the infrastructure [road, rail & air] will certainly facilitate industrial growth and promote ‘Make in India’ paving way for better mobility & accelerate the ease of doing business. We applaud the Government of India’s focus on EV drive towards reducing fuel import. Toyota has been a pioneer in electrified space offering alternate mobility solutions [HEVs, EVs, FCVs, PHEVs] globally. We would further continue our concerted efforts in this direction to boost sustainable mobility to enhance ever-better & comfortable living of the society. The vehicle emission based tax regime would boost this EV vision, towards achieving a cleaner and greener environment. We hope that the tax revenues will continue to grow, enabling the implementation of the budget announcements. We now look forward to the full-fledged budget that would be presented during May-Jun this year.”

Speaking on this, Mr Sohinder Gill, Director General- Society of Manufacturers of Electric Vehicles (SMEV), “Prime Minister Shri Narendra Modi’s and Finance Minister Shri Piyush Goyal’s mission of bringing an Electric Vehicle revolution to India by 2030 is a truly path-breaking and will surely provide much-needed impetus to the industry. The government’s focus on the use of clean energy in the transportation sector would certainly help our country tackle the issue of climate change. EV industry welcomes our Hon'ble Finance Minister’s commitment towards making the country pollution free, in his budget speech 2019-2020.  We hope the government would soon announce a concrete plan of action with its time-bound implementation in order to fulfil its stated vision. SMEV strongly feels that an initial high dose of incentives and actions must be taken in the next 1 or 2 years to relaunch the electric mobility mission that has sort of lost steam in the recent years due to flip flop of policies.”

Mr. Rajan Malhotra CEO & Founder Otodato, “Overall a good budget. Government’s vision 2030 of reducing Petroleum imports by promoting electric vehicles and energy storage devices is laudable and indicates a transformation in the automotive industry in on the cards. The automotive value added services would also need evolve in accordance to the emerging trends and telematics data would play the most important role in the growth of our automotive industry and its ecosystem partners.”

SIAM suggests that the import duty on battery cells can be lowered back to zero with an expiry date, in order, to encourage local battery manufacturers and also to get a solidified solution. Further the apex body also stated that there are some additional components need to be imported at some concessional rates to kick-start assembly operations for EVs. 

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