Government will continue with 5 per cent tax on electric cars and 48 per cent tax on hybrid cars for a “long period of time”, said a senior official on Tuesday, adding that it will also introduce the FAME-III scheme to sustain the electric vehicle (EV) transition and expand charging infrastructure nationwide.
Speaking at the Mercedes-Benz Sustainability Dialogue, G20 Sherpa Amitabh Kant said that the government was taking several policy measures to encourage a shift towards electric mobility in the country.
“We have had a policy framework where the tax on EVs is just 5 per cent as compared to 48 per cent on hybrids, which we intend to continue over a long period of time,” Kant said, adding that the government is pushing for battery manufacturing in a very big way in India.
“Our policy is that we push for more and more electrification in mobility through all the policy levers available including CAFE (Corporate Average Fuel Efficiency) norms. So we will relentlessly push for India becoming a green mobility destination,” he said.
Meanwhile, the Minister for Road Transport and Highways, Nitin Gadkari, on Monday, urged the Finance Ministry and its counterparts in the States to reduce the GST on flex-fuel vehicles to 12 per cent. Currently, 28 per cent GST is levied on internal combustion engine (ICE) vehicles and hybrids, and 5 per cent on EVs.
Bids for e-buses
Kant also announced that the government will soon invite bids for 60,000 electric buses in the country. “Next tender will be for 10,000 buses, followed by another for 50,000 buses. The size and scale will help bring down the prices significantly, much like what India achieved with the procurement of about 320 million LED bulbs,” he said.
The FAME-II scheme was launched in 2019 with a budget outlay of ₹10,000 crore, targeting to support 7,000 e-buses, five lakh electric three-wheelers, 55,000 electric passenger cars and 10 lakh electric two-wheelers.
It was valid till March 31 this year, and to continue the subsidies (for only electric two-wheeler and three-wheeler), it launched Electric Mobility Promotion Scheme (EMPS), 2024, till July 31 with a total outlay of ₹500 crore, which it again extended till September 30, with a total outlay of ₹778 crore.