Will Tesla’s local production plan help in reduced import tax?

MotoGazer Tesla India Import Tax

Last month Tesla Inc. had written to the Government of India (GoI) for reducing the import tax on Electric Vehicles. After reviewing the letter, the GoI has demanded to share a detailed production plan to scale the local production. Based on which the government shall decide on the tax concerns.

Earlier this month in a meeting of Tesla and the Ministry of Heavy Industries & Finance details of the local production were questioned. The ministry also sought Tesla’s view on the import of fully built electric vehicles compared to partially built electric vehicles. That may demand a lesser import duty.

Both representatives of Tesla Inc. & the ministry of heavy industries and finance were not available for comments.

Tesla & Hyundai motors had sought the Import Duties to be reduced for the automobile sector to scale. Tesla had recommended 40% of import duty charged instead of 60% – 100% applicable currently. The company also requested to abolish the 10% social welfare surcharge on all imported vehicles.

Tesla assured it has acquired parts worth $100 million currently from India. And recommended that number would expand following any tax exemptions. Additionally, Tesla committed to direct investment in charging infrastructure, sales & service.

Elon Musk has been eagerly waiting a long while to enter one of the world’s most encouraging automobile markets. But grumbled that the Indian norms preclude him from trying things out with import duties. As high Import Duties shall make Tesla vehicles “unreasonably expensive.”

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