Road transport ministry proposes registration fee exemption for EVs
24 June 2019
The ministry of road transport and highways has made a draft proposal to exempt electric vehicles (battery operated) from payment of registration fee, in a move designed to boost the use of battery-operated or electric vehicles in the country.
The government is expected to make an announcement on this in the union budget which will be presented in Parliament on 5 July. The exemption from registration fee will be valid on all categories of electric vehicles (two, three and four wheelers).
India has set a target of moving into electric transport mode by 2030 and the ministry is reported to have proposed a draft to do away with registration fees for EVs.
The draft proposal by the ministry seeks to exempt electric vehicles from registration cost under the Central Motor Vehicles Rules (CMVR) 1989.
For this, the ministry has initiated steps to make arrangements for differential registration fees under the Central Motor Vehicles Rules 1989.
The ministry has issued a draft notification dated 18 June 2019 to amend Rule 81 of CMVR. With the amendment proposal 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, buyers will be direct beneficiaries.
With electric vehicle registration cost being exempted, government hopes to build more interest around the EV market, and its potential. The draft has been issued for receiving comments and suggestions from stakeholders.
The Indian auto industry is in the midst of major changes, involving upgradation in safety and emission norms with the implementation of AIS 145 safety norms across for all passenger cars. This includes fitment of safety features including driver airbag, seat belt reminder for driver and co-driver, rear parking sensors and an over speed alert. India will also switch over to BSVI emission norms on 1 April 2020.
Despite industry resistance, the government is pushing ahead with plans for mass electrification of two-and three wheelers under 150 cc displacement.
With the auto industry still in the fossil fuel mode across the globe, industry feels it is too early to switch over to an all-electric mode, which they say, will derail auto-manufacturing besides creating consumer discontent.
Manufacturers also point out to the inverted duty structure as the GST input on raw material and other overheads are on average of 18 per cent wherein the output is pegged at 12 per cent. The proposed reduction of the GST on EVs to 5 per cent will increase this anomaly. They have called for a comprehensive GST refund structure for electric vehicle manufacturers or a reduced GST liability on the raw material.
The exemption of Registration Fee will further reduce the prices of electric vehicles sold in India. The exclusion is part of the government's aggressive plans for mass electrification.