The Government has proposed a slew of measures to boost electric vehicles(EVs).
The government has already moved to the Goods and Services tax (GST) council to lower the GST rate on electric vehicles from 12% to 5%.
Besides,the government will also give an additional tax benefit of Rs 1.5 lakh on the interest paid on loans taken for the purchase of EVs.This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles.
Finance Minister has also allocated Rs 10,000 crore to the Faster Adoption and Manufacturing of Electric Vehicles(FAME II) scheme for faster adoption of electric vehicles.The scheme will be implemented over a period of three years with effect from 1st April 2019.
The main objectives of the scheme are a) encourage faster adoption of Electric and hybrid vehicle by way of offering upfront Incentive on purchase of Electric vehicles and b) establish necessary charging Infrastructure for electric vehicles.
The FAME II is an expanded version of FAME I, launched in 2015 which aimed to support hybrid/electric vehicles market development and Manufacturing ecosystem.
The FAME scheme is part of the National Electric Mobility Mission Plan (NEMMP).It aims to achieve national fuel security by promoting hybrid and electric vehicles in the country.