The Centre may distribute incentives to promote electric vehicles in the country by considering lower GST and extending tax advantage for buyers in this week’s Budget for 2018-19, say sources.

Representational image. Representational image.

The announcement is expected in view of the governments aim to get 100 percent electric vehicles for public mobility and 40 percent for personal mobility by 2030.

“Finance Minister Arun Jaitley may announce tax advantages for the electrical mobility from the Budget about 1 February 2018, as there’s been a good deal of brainstorming so much,” industry sources said.

The government may decrease the Goods and Services Tax (GST) on electric vehicles from existing 12 percent to five percent, they said, adding that there could also be income tax advantages to enthuse buyers to make electric vehicles a workable and alluring alternative.

These announcements are likely as these are earnings neutral exercise since the selling of electric vehicles isn’t even one percent of their total sales of vehicles, including commercial vehicles and two-wheelers, in India, sources added.

Revenue of two-wheelers alone were 17.58 million in 2016-17 while passenger vehicles sale has been recorded at 3.04 million in the last fiscal.

Before this week, Power and New and Renewable Energy Minister R K Singh had made a case for tax incentives for electrical mobility and stated, “I believe we also need to give some incentives to electric cars and cars.”

The minister had also suggested that the authorities may procure smaller cars for below its e-mobility programme because of its departments and ministries.

He had said, “Presently, we have (procured) sedan type electric vehicles (cars). I think that we also ought to begin thinking about smaller automobiles.”

State-run Energy Efficiency Services Ltd (EESL) is procuring 10,000 electric cars to be used for official use by the central authorities.

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