US Government is not ready to give tax exemption on import of EV, Tesla may face a shock

EV sales have increased rapidly in the last few years. The government has asked Tesla to set up a manufacturing plant in the country and start manufacturing EVs.


                                     There is a tax of 60 percent to 100 percent on vehicles imported into the country.

The Central Government is not considering any proposal to give tax exemption on import of Electric Vehicles (EV) in the country. This may deal a blow to American electric vehicle maker Tesla. Tesla had sought exemption from import tax from the government to start selling its electric cars in the country. 

On a question related to subsidy on import tax and value addition to Tesla and other foreign car makers from local components, Minister of State for Commerce and Industry Som Parkash said that the government has approved Rs 25,938 crore for the automobile and auto component industry. A production-linked incentive scheme was announced along with budgetary allocation. He said that its objective is to increase manufacturing of products with advanced automotive technology including EV in the country. He said that there is no proposal to give tax subsidy on import of EV. 

About two years ago, Tesla had requested the government to impose 40 percent import tax on EVs. There is a tax of 60 percent to 100 percent on vehicles imported into the country. Tesla, led by the world's richest man Elon Musk, plans to set up a factory in India. Recently, a report said that if the government reduces the import duty for 12,000 vehicles, then Tesla is ready to invest up to $ 500 million. If the government reduces this tax on 30,000 vehicles, then Tesla can invest up to two billion dollars. EV sales have increased rapidly

in the last few years . The government has asked Tesla to set up a manufacturing plant in the country and start manufacturing EVs. To reduce the cost of EV, it also plans to manufacture batteries in the country. Tesla has also prepared to buy components worth $1.7-1.9 billion from India. Recently, Trade Minister Piyush Goyal had said, "Last year Tesla had purchased components worth about one billion dollars from the country. This year the company's target is to purchase components worth $1.7-1.9 billion." Tesla ranks first in the international market of EV.
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