Hey, Elon seems to have a case !
Context :
Keen on India drive but high import duty remains a roadblock : Musk / Business Line / 25 July
Extract :
Ø "First you pay import duties (100 per cent) then you pay GST which is 48 per cent and then you have registration tax of another 15 per cent.
Ø So, it’s duties on duties on duties — a multiple layers of duties which is keeping this sector very niche,” Balbir Singh Dhillon, Head of Audi India, told BusinessLine recently. That is why for the last five-six years, the luxury car market is stuck in the range of 30,000-40,000 units a year, he said.
Ø Former Managing Director of Mahindra and Mahindra Pawan Goenka came out in support of Musk's demand. "Tesla wants a reduction in the import duty. I think the Government should consider lowering 100 per cent slab to 60 per cent for electric vehicles."
Govt open to Sops if Tesla decides to Make in India / Times of India / 27 July 2021
Extract :
Ø The Centre may consider reducing import duty and other incentives for Tesla if the US-based electric-car maker decided to manufacture its cars in the country. Last week, Tesla founder Elon Musk said that the company wants to launch electric vehicles (EVs) in India.
Ø Replying to a question about the prospect of sales in India, Musk said on Twitter: “We want to do (launch EVs in India) so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India.”
Ø Citing an unnamed official, ET reported that the government may take a fresh look, especially if the company will set up a manufacturing place in the country, emphasising that any order in regard will be sector-specific and not for a specific company.
Ø Discussions are underway with large multinational companies to set up productions units in India. The goods and services tax (GST) on EVs has been reduced to 5 per cent from 12 per cent while that on chargers and charging stations for electric cars has been cut to 5 per cent from 18 per cent.
My Take :
Ø The following comparative tabulation may not be the ACTUAL position and I urge Society for Manufacture of Electric Vehicle ( SMEV / info@smev.in ) to prepare and publish the current real picture
Ø SMEV may also expand the tabulation by adding “ Incentives Applicable “ data for each type of Electric Vehicles (both, under FAME II and additional offered by various States under their respective EV Policies ). I am assuming that these INCENTIVES / CONCESSIONS would equally apply to , both , the fully imported cars as also for locally manufactured cars. If this assumption is wrong, SMEV should clearly bring out its true impact on the final prices in the hands of the buyers
Ø Just reducing IMPORT DUTY ( from 60 % to 40 % for Model 3 of Tesla ), is unlikely to threaten the local EV Manufacturers , since, even after such a reduction, Tesla Model 3 would be 4 – 5 TIMES more costly than a locally manufactured Electric Cars . Hence local manufacturers will continue to enjoy huge price protection
Ø Given that :
# The size of the market for Tesla Model 3 type of LUXURY CARS is absolutely miniscule
# Even after conceding Tesla’s request ( and some more, which Elon might have failed to articulate
), I think that Tesla will not be able to sell, more than 10,000 Model 3, posing no danger to our
local manufacturers,
Central Government should send a clear “ YOU ARE MOST WECOME “ message to EV manufacturers of the World, by quickly announcing :
# Import duty reductions ( 100 % to 50 % and 60 % going down to 30 % )
# GST at 5 %
# Waiver of Registration Fees
Dear Shri Gadkariji,
It is time to make an offer which the EV manufacturers around the World, cannot reject !
With regards,
Hemen Parekh / hcp@RecruitGuru.com / 27 July 2021
Car Type
Ø > Ø > |
| ICE Luxury Imported |
| ICE Luxury Imported |
| Locally manufactured Electric cars |
|
Base Price ( CIF ) |
| $ 40,010
Rs 29.8 L |
| $ 39,990
Rs 29.7 L |
| $ 16,000
( Rs 12 lakh ) |
|
Taxes Applicable
|
|
|
|
|
|
|
|
Add Import Duty |
| 100 % Taking total to $ 80,000 ( Rs 59.5 Lakh ) |
| 60 % Taking total to $ 64,000 ( Rs 44.6 Lakh ) |
|
NIL |
|
Add GST |
| 48 % Taking total to $ 118,400 ( Rs 88 lakh ) |
| 48 % Taking total to $ 94,720 ( Rs 70.4 lakh ) |
| 5 % Taking the total to Rs 12.6 Lakh |
|
Add Registration Tax |
| 15 % Taking total to $ 136,10 ( Rs 101.25 lakh ) |
| 15 % Taking total to $ 108,928 ( Rs 81 lakh ) |
| 0 %
Total remains at Rs 12.6 lakh |
|
Add Local Dealer Margin |
| 10 % Taking total to $ 149,776
|
| 10 % Taking total to $ 119,820
|
| 10 %
Taking the total to
|
|
TOTAL |
|
Rs 111.4 lakh |
|
Rs 89.11 lakh
|
|
Rs 13.86 lakh
|
|
Related Readings :
Ø Can TESLA beat MATAM ? ……………………………………….[ 24 July 2021 ]
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