Government slashes import duty on electric vehicle components

Electric vehicles (EVs) are set to get cheaper following the government's decision to lower the customs duty on import of parts and components of EVs which came into effect on Wednesday. In a major bid to promote domestic assembly of EVs in the country and to control vehicular pollution, the Central Board of Indirect Taxes and Customs (CBIC) has lowered the duty on import of EV components and parts to the range of 10 to 15 per cent. Such duties till date has been in the 15-30 per cent range.

At the same time, the CBIC has withdrawn the customs duty exemption to battery packs for EVs and also doubled the duty on battery packs for mobile phones. The import of battery packs for EVs will now attract 5 per cent tax. The customs duty on battery packs for mobile phone has been doubled to 20 per cent.

"These customs duty rate rationalisations while may increase the cost of import of these goods, but should definitely boost the 'Make in India' initiative of the government," the CBIC said. According to the notification, knocked down kits containing the parts needed to assemble a product, for assembling EVs with disassembled battery packs, motor, brake system, and others which are not mounted on chassis, will attract 10 per cent import duty. If the same is done in pre-assembled packs then the tariff will be 15 per cent.