No Road Tax for Electric Vehicles; New Proposal By Union Ministry

• Published On: 28 June 2019
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Central Govt. Proposes No Road Tax for EVs in India

Indian government is pushing for greater usage and quicker adoption of electric vehicles in the country. In a bid to reinforce the same efforts, the Ministry of Road, Transport and Highway has initiated steps that could abolish the road tax for registration of new electric vehicles bought in the country. The exemption will apply to all electric 2-wheelers, 3-wheelers, and 4-wheelers sold in the country. The move has a lot of potential benefits as it will not only be a boon for the customers but it will also provide an impetus to makers of electric vehicles. The proposal also talks of currently operating electric vehicles being exempt from renewal fees.

This move was supposed to take place when the government introduced the FAME-II subsidy regime for electric vehicles, but since that could not happen the ministry is making new efforts now. This move could extend the exemption that the taxi vehicles got in FAME-II subsidy and bring it to the private cars as well. The ministry has issued a statement regarding the same stating,

“In order to give a boost to battery-operated or electric vehicles in the country, the ministry of road transport and highways has initiated steps for providing for differential registration fees under the Central Motor Vehicles Rules 1989,”

The new proposal from the ministry would require making amends to the Motor Vehicles Rules at the Union level. The statement from the ministry also stated,

“The amendment proposes to exempt battery operated vehicles from payment of fees for the purpose of issue or renewal of registration certificate and assignment of new registration mark,”

The government of India has an ambitious plan of phasing out the sales of new fossil fuel vehicles by the year 2030. Before, that April 2020 will also witness the new cars sold in India complying with the stricter BS-VI emission norms as the country jumps to BS-VI norms directly from the BS-IV norms. Not just this, the government is also in talks to sell only electric two-wheelers come 2023 and only electric 2-wheelers under 150cc come 2025. However, the last two decisions are still being mulled over as the government would also not want the auto industry to take a hit amid the aggressive pursuit of a cleaner India.

The industry leaders have already expressed concern over government’s 2023 deadline to phase out sales of fossil fuel vehicles. However, undeterred by the same, the government in its pursuit to reduce emissions in India and bring down the country’s oil import, has been making bold decisions regarding electric vehicle policy in India.