New Delhi: With the Centre beginning to take a small step to boost electric vehicle manufacturing, industry body Society of Manufacturers of Electric Vehicles (SMEV) says it wants states to support the initiative by eliminating road tax and VAT for a few years.
"Now that the Centre has cleared the roadmap for the growth of electric vehicles in India, SMEV expects states to join in to support this initiative," SMEV director-corporate affairs Sohinder Gill said in a statement.
Elaborating on the current situation in this regard, he said that presently many states like Uttar Pradesh, Punjab, Haryana, Maharashtra have been charging VAT as high as 14 per cent or more, road tax of 4 to 6 per cent, nullifying the National Electric Mobility Mission Plan (NEMMP).
"SMEV requests such states to immediately revert to 0 VAT and eliminate road tax for few years," Gill said.
In the Budget 2015-16, Finance Minister Arun Jaitley earmarked Rs 75 crore for faster adoption and manufacturing of electric vehicles in 2015-16, a step which electric vehicles makers termed as a good beginning.
Further, the concessional excise duty of 6 per cent on specified goods for use in manufacture of electrically operated vehicles and hybrid vehicles, presently available up to this March, is being extended for another year.
He said the biggest beneficiary of NEMMP will be companies manufacturing electric two-wheelers and small electric cars, who have managed to survive through the difficult years and have been still active in the market.
An ambitious target of putting 5 million electric and hybrid vehicles per year on the road by 2020 had been set under the NEMMP.
In addition to supporting the industry, NEMMP seeks to create a significant positive impact on the health index of country by promoting zero pollution electric vehicles and reducing the dependence on fossil fuel.
The previous UPA government had launched the NEMMP 2020 in 2013. The targets were envisaged to result in substantial lowering of vehicular emissions and decrease in carbon dioxide emissions by 1.3 per cent to 1.5 per cent in 2020.