GST reduction & incentives for electric vehicles in India |
India is gearing up the policy groundwork to fast-track the transition to electric vehicles EVs, with the government announcing several incentives and GST rate cuts. The move has been welcomed by the automotive industry and has created the right framework for a smoother and faster transition. Currently, the EV industry in India is crawling as it amounts to only less than 1% of the total vehicle sales. The government aims to achieve 30% EV penetration in the transport sector by 2030, through Faster Adoption and Manufacturing of Hybrid & Electric Vehicles Policy, which is likely to drive the growth of EV market in India. Governments` decision to reduce the Goods and Services Tax levied on electric cars to just 5% and other incentives offered by state governments have created the right framework for major players to kickstart their plans to bring in more and more electric vehicles to the domestic market. The government has urged automakers to increase production and sales of electric vehicles in order to reduce vehicle pollution in major cities and reduce their reliance on imported crude oil which alone accounts for 18% of the total energy consumption. To attract foreign investment in electric vehicle technology and lower the cost of ownership, the goods, and services tax levied on these zero-emission vehicles was also reduced in 2019.
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