The Central Government has revealed that it is not considering any changes to the tax rates for importing electric vehicles into the country. The issue of high custom duties in India rose to prominence following Tesla’s recent request to lower the tax slab for EVs.
Commenting on the prospect of lowering custom duties on imported electric vehicles, Krishan Pal Gurjar, MoS in the Ministry of Power and Heavy Industries said, “No such proposal is under consideration by the Ministry of Heavy Industries.”
Cars imported into India are currently taxed at 60% for vehicles costing below $40,000, or at 100% for vehicles with prices above $40,000. Tesla, meanwhile, has been lobbying a reduction of the customs duty to 40% for EVs. The company is gearing up to enter the Indian market and has already set up its Indian subsidiary — Tesla India Motors and Energy Pvt. Ltd.
The American EV maker is expected to launch the Model 3 in India this year. Under the current tax structure, the Model 3 could end up costing ₹60 lakh (ex-showroom).
In the past, Tesla has said the success of its imported models will ultimately influence its plans for local manufacturing in India. However, with high tax rates leading to a mark-up in vehicle prices, the automaker could face challenges in its India journey.
