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Old 31st January 2019, 20:15   #1
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Default Import duty on EV components slashed by half to 10-15%

The government of India has lowered the import duty on components for electric vehicles (EVs) from 15-30% to 10-15% from January 30, 2019. The move is aimed at encouraging local assembly of electric vehicles.

Import duty on EV components slashed by half to 10-15%-nissanev.jpg

Completely knocked down (CKD) kits, which include disassembled battery packs, electric motor and braking system among other parts that are not mounted on the chassis will attract 10% duty, while pre-assembled packs will be charged 15% duty.

The Central Board of Indirect Taxes and Customs (CBIC) has classified EV components into a separate category with lower customs duty. On the other hand, customs duty exemption on battery packs for electric vehicles has been removed. As a result, battery packs for EVs will attract 5% import duty.

Source: Economic Times

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Last edited by SmartCat : 1st February 2019 at 14:33. Reason: Financial Express clarification on EV CBU taxes
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Old 1st February 2019, 10:58   #2
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Default re: Import duty on EVs slashed; CKDs at just 10% & CBUs at 25%

Wow this is indeed unprecedented news! 25% duty on a CBU is unheard of. Does this mean that major EV players (tesla, nissan etc) can look at bringing over their cars as CBUs - since the lower duty won't result in insane prices?

Lower cost of duty on the components will be a good incentive to get these companies to set up manufacturing facilities in India.

Only problem is how we can develop a reliable charging network that can handle the volume of Indian traffic - this may be a pipe dream for quite a while.

Last edited by Games Goblin : 1st February 2019 at 10:59. Reason: Typo
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Old 1st February 2019, 13:12   #3
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Default re: Import duty on EV components slashed by half to 10-15%

Quote:
Originally Posted by TusharK View Post
Completely knocked down (CKD) kits, which include disassembled battery packs, electric motor and braking system among other parts that are not mounted on the chassis will attract 10% duty, while pre-assembled packs will be charged 15% duty. EVs imported into the country as completely built units (CBUs) attract 25% import duty.
This is awesome. If luxury car makers had a wider range of EVs abroad, they would come in droves overnight (especially the launch-a-CBU-a-week Mercedes). Am sure we're going to see some exciting cars from Audi to Mercedes and everyone in between in 2 - 3 years. Tesla? Might be a while since they're busy with stuff in the home market. However, I see a lot of individuals importing cars like the Model 3 now.

Among the mass market manufacturers, things just got easier for the Nissan Leaf which was anyway coming later this year. The Hyundai Ioniq or Kona too? How about the Ford Focus EV?

This will definitely just be a temporary move to jump start the EV cause in India. With time, India will (and should) increase the import duties on these.
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Old 1st February 2019, 13:28   #4
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Default re: Import duty on EV components slashed by half to 10-15%

Let us see the impact. Tata has shown a prototype eVision (looks like a saloon, only a rear view). It is supposed to be an EV, range 1000 km per charge (I doubt it), 10 years warranty on the power pack. The price has been state as 12L as well as 25L (I think the latter). What will be the impact of the duty cut on this vehicle. Obviously I expect Tata to Import the Power Pack, and the motor.

To be shown in the 2020 Motor Show. I hope it is true, and does not fall into the Nano trap. Nano was killed by politics.
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Old 1st February 2019, 13:35   #5
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Default re: Import duty on EV components slashed by half to 10-15%

Quote:
Originally Posted by TusharK View Post
EVs imported into the country as completely built units (CBUs) attract 25% import duty.
Quote:
Originally Posted by Games Goblin View Post
Wow this is indeed unprecedented news! 25% duty on a CBU is unheard of.
Quote:
Originally Posted by GTO View Post
This is awesome. If luxury car makers had a wider range of EVs abroad, they would come in droves overnight
Gents, CBU import taxes stay at 100% or whatever for Electric Vehicles. It has not been reduced to 25%. Think about it -> if CBU import tax on electric vehicles is reduced to 25%, then there is no incentive for manufacturers to import components and make EVs in India. Economic Times article too does not mention CBU import taxes.

Although reduction in EV components import taxes is good start, it is not a game changer yet. Petrol and diesels will still maintain a significant cost advantage over EVs.

Last edited by SmartCat : 1st February 2019 at 13:50.
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Old 1st February 2019, 13:40   #6
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Default re: Import duty on EV components slashed by half to 10-15%

Name:  EVision.jpg
Views: 1720
Size:  28.6 KB
This is the image of the Tata eVision I got
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Old 1st February 2019, 13:59   #7
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Default re: Import duty on EV components slashed by half to 10-15%

Quote:
Originally Posted by TusharK View Post
Completely knocked down (CKD) kits, which include disassembled battery packs, electric motor and braking system among other parts that are not mounted on the chassis will attract 10% duty, while pre-assembled packs will be charged 15% duty. EVs imported into the country as completely built units (CBUs) attract 25% import duty.
Correct me If I'm wrong please, but does this mean something like a fully built Tesla Roadster imported will attract just 25% import duty in total?
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Old 1st February 2019, 14:08   #8
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Default re: Import duty on EV components slashed by half to 10-15%

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Originally Posted by SmartCat View Post
Gents, CBU import taxes stay at 100% or whatever for Electric Vehicles. It has not been reduced to 25%.
Pease take a look at this notification and let us know what it means. Since it talks about changes, I could only partially understand it.

Thanks.
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Old 1st February 2019, 14:11   #9
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Default re: Import duty on EV components slashed by half to 10-15%

The import duty for CBU does not seemed to have changed, its just for the CKD. Just read an article in Financial Express

Quote:
The custom duty on vehicle parts and components imported for assembly has so far been 15 to 30 percent. But now, the government has drastically lowered it to 10 to 15 percent. The move has been hailed by the apex automotive body Society of Indian Automobile Manufacturers (SIAM). Also, the government's decision not to provide concession on import duty of CBU (completely built up) vehicles has also been welcomed as a push to Make in India initiative.
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Old 1st February 2019, 14:12   #10
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Default re: Import duty on EV components slashed by half to 10-15%

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Originally Posted by GTO View Post
If luxury car makers had a wider range of EVs abroad, they would come in droves overnight (
Quote:
Originally Posted by Maky View Post
Correct me If I'm wrong please, but does this mean something like a fully built Tesla Roadster imported will attract just 25% import duty in total?
I am not good in reading these circulars but I don't think Custom Duty has been reduced to 25 % on Electrical vehicles. It stays at 60 % (less then 40,000 USD) and 100 % ( Over 40,000 USD)

Heres the notification, maybe Thread title needs to be corrected.

http://www.cbic.gov.in/resources//ht...5EB9A4EEDF6859
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Import duty on EV components slashed by half to 10-15%-11.jpeg  

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Old 1st February 2019, 14:17   #11
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Default re: Import duty on EV components slashed by half to 10-15%

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Originally Posted by blackwasp View Post
Pease take a look at this notification and let us know what it means. Since it talks about changes, I could only partially understand it. Thanks.
Looks like the notification has not been worded properly -> "In any other form other than knocked down kit - 25%". But this article suggests that Government has issued a clarification on this matter.
https://www.financialexpress.com/aut...nents/1461562/

Quote:
Also, the government's decision not to provide concession on import duty of CBU (completely built up) vehicles has also been welcomed as a push to Make in India initiative. 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%/100% for passenger vehicles, 50% for two-wheelers and 25% for trucks & buses as they are for conventional vehicles as suggested by SIAM.

Last edited by SmartCat : 1st February 2019 at 14:20.
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Old 1st February 2019, 14:24   #12
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Default re: Import duty on EV components slashed by half to 10-15%

I am of the opinion that instead of slashing duty they should have given an outlay for building infrastructure of charging stations on highways. That is what will encourage manufacturers and give them an indication that the government is serious on alternate energy.

What they have done is more like window dressing. The volumes are extremely low to matter in the current scheme of things.

Even in this budget emphasis was laid on going electric for personal transport by 2030. For this to happen, large scale outlay should start happening now. Else vision 2030 will not be realised even by 2040.
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Old 1st February 2019, 14:28   #13
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Default re: Import duty on EV components slashed by half to 10-15%

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Originally Posted by sgiitk View Post
Nano was killed by politics.
If TATA is open for partnership just like JTP, I am sure they can attract alot of potential companies who can convert the Nano into an EV. This can be a win-win.

Somehow, I don't want to see the little Nano die.
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Old 1st February 2019, 15:56   #14
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Default Re: Import duty on EV components slashed by half to 10-15%

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Originally Posted by sgiitk View Post
Nano was killed by politics.
I think it was quite the opposite though. They got a lot of attention to the product but the low-cost image screwed the product and it's image big time. It was always a poor man's alternative to a 2-wheeler. This made sure every TG (Lower middle class) never looked at the product to upgrade.

COming back to the topic! I hope this brings new products to the Indian market. I think the market for a 2-seater electric car with about 200/300 km range is perfect for the city. Exciting times ahead!
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Old 1st February 2019, 16:18   #15
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Default Re: Import duty on EV components slashed by half to 10-15%

Great move!

But why introduce a tax on the EV battery pack?! A bit counter-intuitive. Even then I guess the overall cost of an EV will go down now.
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