SIAM welcomes import duty cut on EV components

Country's apex automotive body Society of Indian Automobile Manufacturers has welcomed the government's move to reduce the customs duty on import of parts and components of electric vehicles. It said the decision will aid local assembly and consequently, EV adoption as well.

According to a notification issued by the Central Board of Indirect Taxes and Customs (CBIC), the duty on import of EV components have been lowered to 10 - 15 per cent, from 15-30 percent. The import of battery packs for EVs or hybrids is now 5 percent.

However, the apex auto body observed that the increase in import duty on battery cell from nil to 5 percent would make the introduction of electric vehicles more difficult as battery cells are not currently manufactured in the country. It recommended that  the import duty be kept at nil with an expiry date announced upfront to enable battery and automobile companies to plan for local assembly.

The components that fall under the purview of 10 percent import duty include a knocked down kit containing a battery pack, motor, motor controller, charger, power control unit, energy monitor, contractor, brake system and electric compressor not mounted on chassis and in "disassembled" form. If the same components are in a "pre-assembled" form, they will attract 15 percent import duty, the according to the CBIC notification.

SIAM observed that the notification has also removed ambiguity in the definitions of CKD and SKD of electric vehicles for all the vehicle segments. The fully built electric vehicles will still attract 60 percent/100 percent for passenger vehicles and 50 percent for two-wheelers as suggested by SIAM.