BackBudget 2023: Will EVs get cheaper as govt cuts customs duty on ion batteries?
The Union Budget 2023 has removed custom duty on capital goods/machinery for manufacture of lithium-ion cells for use in batteries of electrically operated vehicles (EVs). The move is said to help in reducing the cost of EVs in the country.
PremiumUnion Finance Minister Nirmala Sitharaman presented the Union Budget 2023 in the parliament on February 01, 2023. The minister made a crucial announcement on the exemption on Customs duty on lithium-ion batteries.
The Union Budget 2023 has removed custom duty on capital goods/machinery for manufacture of lithium-ion cells for use in batteries of electrically operated vehicles (EVs). The move is said to help in reducing the cost of EVs in the country.
“To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles," Finance Minister Nirmala Sitharaman said in her speech.
As per the budget, the major focus of the government is to promote biogas and hydrogen production along with tax exemptions on capital goods imports connected to electric vehicle batteries.
The finance minister has reiterated the government’s focus on green mobility by emphasizing on the recently launched National Green Hydrogen Mission. She said that with an outlay of ₹19,700 crores, the National Green Hydrogen Mission will “facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector". “Our target is to reach an annual production of 5 MMT by 2030," she added.
In the Union Budget 2023, the finance minister proposed to reduce the number of basic customs duty rates on goods, other than textiles and agriculture, from 21 per cent to 13 per cent. As a result, there are minor changes in the basic custom duties, cesses and surcharges on some items including automobiles.
The Union Budget 2023 increases the tax rebate limit on personal income from ₹5 lakh to ₹7 lakh. This is likely to offer more disposable income with the salaried citizens to spend on goods like automobiles.
“Currently, those with income up to ₹5 lakh do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to ₹7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to ₹7 lakh will not have to pay any tax," the minister said.
Commenting on green mobility, Rajeev Singh, Partner and Automotive Sector Leader, Deloitte India, presented his viewpoint. According to Singh, Despite all the uncertainty globally, todays Budget is very progressive, future looking and should drive consumption.
“From Auto Sector perspective, the increase in outlay for Capital Spending, increase in spending on Infrastructure, setting up 50 new Airports, creation of 100 Transport Infrastructure projects, central support for replacing old vehicles should all drive demand of vehicles. Focus on Agriculture & Rural India are also all steps in reviving rural economy which impact 2W and entry level cars. Overall the focus on Green India should also assist in transitioning of Auto Industry to Clean Mobility," says Singh.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
