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Posted at: Dec 20, 2018, 12:57 AM; last updated: Dec 20, 2018, 12:57 AM (IST)

Govt plans levy on petrol, diesel cars to boost EV demand

New Delhi, December 19

The government has drafted a plan to levy a fee of Rs 12,000 on new petrol and diesel cars in an attempt to boost the manufacturing of electric vehicles (EV) and battery-driven automobiles, according to a media report.

Under the new policy that is nearing finalisation, National Institution for Transforming India (NITI), a government policy think-tank, has proposed that incentives ranging from Rs 25,000 to  Rs 50,000 be directly transferred to EV buyers, ensuring that gains are not pocketed by auto manufacturers, government officials said.

New incentives will be proposed along with other benefits such as lower customs duty, goods and services tax on raw material, components and battery packs, waiver of registration fee and road tax for all EVs, according to the report.

The proposed incentives for EV owners will be trimmed to Rs 15,000 from Rs 50,000 by the fourth year of the policy implementation, according to the media report.

Citing a source, the report stated that part of the surcharge will be used to encourage domestic battery production and that the government plans to spend about Rs 200 crore for developing indigenous technology in power electronics and battery development. NITI Aayog did not immediately respond to Reuters’ request for comment. — Reuters

‘Won’t serve purpose’

Imposing cess on conventional vehicles to promote electric cars will not serve the purpose as only the rich would end up receiving subsidies, Maruti Suzuki Chairman RC Bhargava said on Wednesday.

Bhargava said all around the globe, including the US and Europe, electrification of cars has met with little success so far. — PTI

Proposed plan 

  • Under the new policy that is nearing finalisation, NITI Aayog has proposed that incentives ranging from Rs 25,000 to Rs 50,000 be directly transferred to EV buyers
  • New incentives will be proposed along with other benefits such as lower customs duty, goods and services tax on raw material, components and battery packs, waiver of registration fee and road tax for all EVs
  • The proposed incentives for EV owners will be trimmed to Rs 15,000 from Rs 50,000 by the fourth year of the policy implementation.

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