Tax Exemption For Battery Operated Vehicles

Providing tax exemption on battery operated vehicles is one aspect on which the Indian Government has always taken a late decision forcing many manufacturers to either postpone their electric model line-up plans or completely discard them. With sky-rocketing fuel prices, it is evident that electric vehicles are indeed going to play a solution for the mode of transportation in the near future, though I have a strong negative opinion about it becoming the future of transportation.

Recently, the State Motor Vehicles department has decided to exempt cars that are running on batteries from paying any motor vehicle tax. From now, an electric vehicle sold in Maharashtra that runs on rechargeable batteries deriving energy from electricity or renewable energy sources will have a 100 percent exemption from paying vehicle tax. The exemption also applies to vehicles from other states that have to be re-registered in the state. The department expects the number of electric vehicles plying on the roads to increase after this announcement.

Mahindra had recently raised concerns about demand for its electric vehicle the Reva falling down drastically due to Govt’s late decision in providing tax exemption for such vehicles. With the law now in place, the Reva sales are expected to pick up once again. More manufacturers might also target this space to gather sales volumes but a lack of proper electricity infrastructure hinders companies from venturing into this segment.