In order to support and improve the adoption rate of electric vehicles (EVs) in the country, the Society of Indian Automobile Manufacturers (SIAM) has sent a proposal to the central government towards providing extra benefits for people buying EVs. The proposal contains suggestions such as a reduction in GST rate on EVs from the current 12 per cent to 5 per cent along with a complete exemption of road tax.
The proposal also suggests that non-financed EV buyers receive a one-time income tax reduction of an amount equal to 30 per cent of the EVs total cost. To place a price cap on the incentives given under the proposed scheme, SIAM has also suggested that Rs 25 lakh be taken as the maximum price of the EV. For a person taking a loan to buy an EV, SIAM has suggested an income tax deduction of up to Rs 1 lakh on the interest amount across the loan period.
The paper submitted by SIAM to the government said, “Demand incentives or cash subsidies can at best be a short-term measure to kick-start the process. However, tax rebates and other fiscal and non-fiscal measures can be sustained over a longer term and will have a greater impact and outreach."
Along with the cash and tax benefits, SIAM has also proposed that power tariffs for charging EVs be made half of what it costs to supply power to a home. Other suggestions by SIAM include exemption from toll charges and parking fees for personal EVs along with permission to use electric two-wheelers as taxis across the country.
SIAM has also requested the government to push forward the deadline to produce and sell only EVs in the country from 2030 to 2047. The manufacturer’s society expects that 40 per cent of total vehicles sold in 2030 would comprise of EVs.