CHENNAI: A concessional excise duty of 10 per cent for vehicles that use green technology was announced by Finance Minister Pranab Mukherjee in his budget speech on Monday.
Mukherjee hailed the Indian automobile market as the second fastest growing in the world that had showed a nearly 30 per cent growth this year. “World over, substantial investments are being made in the field of hybrid and electric mobility. To provide green and clean transportation for the masses, national mission for hybrid and electric vehicles will be launched in collaboration with all stakeholders,” he said.
Stating that the fuel cell and hydrogen cell were promising green technologies for the automobile sector, he said a concessional excise duty of 10 per cent would be extended to vehicles based on this technology.
In the previous budget, full exemption from basic customs duty and a concessional rate of central excise duty of four per cent was provided to specific parts of electrical vehicles on actual-user basis. Now, the concession has been extended to batteries imported by such manufacturers for the replacement market.
Hybrid vehicles enjoy a concessional excise duty rate of 10 per cent. However, import dependence for their critical parts and sub-assemblies is still quite high. “It is proposed to grant specified parts of such vehicles full exemption from basic customs duty and special CVD (counter vailing duty). In addition, a concessional rate of excise duty of five per cent is being prescribed to incentivise their domestic production.”