Tuesday, June 25, 2024

Fully imported cars, EVs, to cost more

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New Delhi: Fully imported cars, including electric vehicles will cost more with Finance Minister Nirmala Sitharaman announcing hike in customs duty.Customs duty on vehicles in completely built units (CBUs) costing less than USD 40,000 or with engine capacity less than 3,000 cc for petrol-run vehicles and less than 2,500 cc for diesel-run vehicles has been raised from 60 per cent to 70%.

Similarly, customs duty on electrically operated vehicles in CBU form, other than with cost, insurance and freight (CIF) value of more than USD 40,000, has also been raised to 70% from 60%. The Budget also outlined that customs duty on vehicles, including electric vehicles, in semi-Knocked down (SKD) form will rise to 35% from 30% earlier.

Already, cars imported as CBUs with CIF more than USD 40,000 or with engine capacity more than 3,000 cc for petrol-run vehicles and more than 2,500 cc for diesel-run vehicles attract 100% customs duty.

“The Government has proposed to increase the duties on completely built units (CBUs) to 70 per cent from 60 per cent earlier.”This is unlikely to have a material impact as most of the luxury cars are now assembled in India, barring the top-end variants.

Nonetheless, an increase in customs duty will further aim to promote domestic manufacturing going ahead,” Icra Senior Vice President & Group Head Corporate Ratings Shamsher Dewan said.

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