Elon Musk’s call for tax breaks rejected by India
The Centre has again turned down the demand of Tesla for tax breaks to import electric cars, saying rules already allow bringing in partially-built vehicles and assembling them locally at a lower levy.
Elon Musk, the billionaire and owner of Tesla, had been seeking tax breaks from the Indian government for a while. But the government has maintained that the US-based electric car company must manufacture in India in order to be considered for tax benefits.
Prime Minister Narendra Modi’s administration has encouraged Tesla to produce locally, while Musk wants India to lower taxes, as high as 100 percent on imported electric vehicles, to enable the company to first sell cars built elsewhere at competitive prices.
Vivek Johri, chairman of India’s Central Board of Indirect taxes and Customs said, “We looked at whether the duties need to be re-jigged, but some domestic production is happening and some investments have come with the current tax structure.”
According to Johri, Tesla has yet to present a plan for local manufacturing and procurement from India, even after the government asked for it. The Union Budget didn’t mention any tax breaks for the cleaner but imported vehicles, even though Maharashtra publicly backed Tesla’s demands.
Tesla should follow the lead of domestic companies like Mahindra & Mahindra and Tata Motors which are investing in building local capacity for electric vehicles, Johri said, while adding that “There are others importing completely built units. That route is open.”
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