A big push for e-vehicles as government orders 100% tax exemption

While manufacturers and owners welcome move, clean energy activists worry over the lack of guidelines on buyback and scrapping policies

November 04, 2020 01:19 am | Updated 01:19 am IST - CHENNAI

Full coverage: The tax exemption will apply to all battery-operated vehicles, including transport and non-transport types, till December 31, 2022.

Full coverage: The tax exemption will apply to all battery-operated vehicles, including transport and non-transport types, till December 31, 2022.

Electric vehicle manufacturers and those wanting to own clean energy vehicles have a lot to cheer this festival season with the State government announcing 100% tax exemption for battery operated vehicles for more than two years. The additional good news is that the tax exemption is being extended to even transport vehicles (which are used for commercial purposes).

In a Government Order issued by Additional Chief Secretary S.K. Prabhakar on Monday, the State government gave 100% tax exemption for all battery-operated vehicles, including transport and non-transport ones, from November 3 to December 31, 2022.

Transport Commissioner T.S. Jawahar said the decision of the State government would help in giving a big push to electric vehicle sales and also help in reducing pollution. He said that despite the earlier tax waiver of 50% given only to non-transport vehicles, sales in the State were still lacking.

The G.O. comes in the wake of the Transport Commissioner seeking 100% waiver of vehicle tax for both transport and non-transport vehicles through a letter to Chief Minister Edappadi K. Palaniswami in November last.

A senior official of the State Transport Department said several State governments and Union Territories, such as Delhi, had been giving tax breaks of different percentages but a big State like Tamil Nadu giving 100% exemption would pave the way for promoting the sale of e-vehicles for commercial exploitation in a big way. All that the e-vehicle purchasers would have to pay would be the registration charges of a minimum of ₹1,200 for two-wheelers and ₹2,500 for four-wheelers.

Electric vehicle manufacturers welcomed the move to waive road tax for more than two years.

Festival gains

Ravneet Singh Phokela, chief business officer, Ather Energy, said, “The past few days have been great for the e-vehicle industry, with progressive policies continuing to come into play. The removal of the 4% road tax will significantly reduce upfront costs. This has come at an opportune time for Ather as we begin deliveries of the Ather 450X in Chennai this Deepavali. With this announcement, residents of Chennai and Coimbatore will now save nearly ₹6,900 when they purchase Ather scooters. This is a welcome move for the entire industry and will accelerate the shift towards EVs.”

However, clean energy activists are taking the tax break with a pinch of salt. Sivasubramaniam, of the Institute for Transportation and Development Policy India, said, “A welcome move from the Tamil Nadu government to promote electric vehicles. However, the sale of private motor vehicles is already sky-rocketing since the COVID-19 pandemic began. Considering the higher reliance on private motor vehicles, it is advisable to consider the purchase of new vehicles along with old vehicle buyback and scrapping policies.”

This would help in controlling the number of vehicles in the system, he said. In addition, promoting electric vehicles was better for the environment only if it was fully supported through clean energy, he added.

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