VAT has imposed brakes on e-vehicles in Gujarat: CII GKAFC study

Aug 20 2014, 23:02 IST
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SummaryThe percentage of VAT imposed by Gujarat on electric vehicles is the highest in the country, states a study.

The imposition of a "whopping" 14.5 percent Value Added Tax or VAT on electric vehicles in Gujarat has broken the back of this non-polluting automobile segment in the state, states a consumer perspective study for electric vehicles that was released here on Wednesday.

The percentage of VAT imposed by Gujarat on electric vehicles is the highest in the country, states the study --- titled 'Consumer Perspective towards E-mobility (In twin cities of Ahmedabad & Gandhinagar)' --- released by Ahmedabad city mayor Minakshi Patel at a conference here.

"The whopping 14.5 percent of VAT on electric vehicles has applied brakes on promotion of electric vehicles in the state.... While Rajasthan, Punjab and Haryana do not levy any tax on e-bikes and e-cars, Delhi even offers a subsidy on such non-polluting vehicles," states the study prepared by CII Gujarat Knowledge Application & Facilitation Centre.

"Because of high taxes, electric cars are not sold in Gujarat. The electric car which is sold in Delhi for around Rs 3.5 lakh is priced around Rs 5 lakh in Ahmedabad," the study states.

Electric vehicle manufacturers like Morello Yamasaki who were was part of the conference where this study was released stated that it was the state government policies that played a major role in the sale of electric vehicles. "The percentage share of electric vehicle sold in states like Gujarat have slipped to about 10 percent, from 30 percent few years back. This share of electric vehicle sales have grown in states like Delhi," says Rajit Arya, CEO, Morello Yamasaki.

Of the 470-odd respondents of this study, conducted in August in the cities of Ahmedabad and Gandhinagar, 82 percent of them thought that "a discount on base price will change customer's decision to buy electric vehicles instead of fossil fuel-run vehicles."

Apart from high prices, other important barriers for electric vehicles in these cities were high charging time, low pick up, limited running range, low top speed and battery life.

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