Centre Lowers Import Duty on Components for Electric Vehicles

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To promote domestic assembling of electric vehicles, the government on Tuesday, 29 January, lowered customs duty on import of parts and components of such vehicles to 10 to 15 percent.

Until now, vehicle parts and components imported for assembly in India attracted import duty of 15 to 30 percent.

The Central Board of Indirect Taxes and Customs (CBIC) has carved out a separate category for parts and components of electric vehicle for which customs duty has been lowered to 10-15 percent.

Further, the CBIC has removed customs duty exemption to battery packs for electric vehicles and also doubled the duty on battery packs for mobile phones.

Henceforth, import of battery packs for electric vehicles will attract five percent tax. Customs duty on battery packs for mobile phone has been doubled to 20 percent.

The new rates of duties will come into effect from Wednesday, the CBIC said.

EY Tax Partner Abhishek Jain said, "These customs duty rate rationalisations while may increase the cost of import of these goods, but should definitely boost the 'Make in India' initiative of the government."