Assembled EVs' cost to rise on higher customs duty proposal

New Delhi: Electric vehicles assembled in India will cost more from April 1, 2020 as the Union Budget 2020-21 has proposed to raise the custom duty structure.

Passenger vehicles, two-wheelers, three-wheelers and buses which are assembled here will be impacted by the proposal.

"Under Make in India initiative, well laid out customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components," Finance Minister Nirmala Sitharaman said in her Budget speech on February 1.

"This has ensured gradual increase in domestic value addition capacity in India. Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived 'Phased Manufacturing Plans'."

The changes in customs duty under "Phased Manufacturing Programme for Electric Vehicles" propose that customs duty on completely knocked down (CKD) units of passenger vehicles, three wheelers, two wheelers, buses and trucks be raised from 10 to 15 per cent from April 1.

Besides, the proposal envisages a higher customs duty rate on semi knocked down (SKD) units of passenger vehicles and three-wheelers from 15 to 30 per cent.

Sitharaman also proposed that customs duty on semi knocked down (SKD) units of buses, trucks and two wheelers will be hiked from 15 to 25 per cent, and customs duty on completely built units of bus and trucks will be raised from 25 to 40 per cent.