Electric Vehicles May Benefit From Tax Sops In 2018 Budget
The 2018–2019 Budget may see tax benefits for electric vehicles in the form of reduced GST rates or income tax rebates. The Budget which will be out on 1st February aims to promote the use of electric vehicles for public and personal mobility and has fixed a usage target of 100% and 40%, respectively, for them by 2030. If industry sources are to be believed there had been a lot of brainstorming prior to the Budget framing to devise best ways to promote the electric vehicular usage in the country.
The Budget may see a reduction in GST rate by 8% and the reduced GST rate of 5% along with income tax rebates to the individual consumer may help to generate greater interest in the electric vehicles. While it is possible to incorporate Income tax rebates in the forthcoming Budget, GST rate reduction will need the approval of the GST Council.
Chances of these announcements being made are high due to their zero impact on the revenue situation. One of the major reasons for this is the negligible percentage of their sales as against the total vehicle sales in the country, counting the two wheelers and commercial vehicles.
The Power and New and Renewable Energy Minister, R K Singh had voiced his opinion for pushing the sales of electric vehicles and cars through incentives and had disclosed the government’s idea of procuring diminutive cars for ministerial and departmental use within the e-mobility program. He further added that Energy Efficiency Services Ltd., a state-run body would be getting 10,000 electric cars to be used for official purposes by the Central Government. In this context, he said that though these electric cars were sedan models they ought to start giving preference to smaller cars.
The 2016–2017 sales of passenger vehicles had touched 3.04 million while that for two wheelers had been 17.58 million.