The Karnataka government is likely to end 100% road tax exemption given to electric vehicles, a move that could affect adoption of battery-run vehicles in the state. The announcement is expected to be made in the state budget that will be presented on July 7.
If announced, the move could make electric vehicles expensive in the state, deterring prospective buyers to opt for EVs.
As per a report on Moneycontrol, the move by the Congress-led dispensation is aimed at increasing the state revenue. It is pertinent to mention here that Motor Vehicle Tax is one of the major source of revenue for the southern state.
Karnataka exempted all EVs from paying road tax in 2016.
Out of the two crore registered vehicles in the state till Decembe 2022, EVs account for only 1.5 lakh. As many as 61,598 EVs were registered in the Karnataka between May and December 2022. In 2017, it became the first state to come up with an Electric Vehicle and Energy Storage Policy.
The state also imposes the highest road tax for non EVs in the country. Cars below Rs 5 lakh need to pay around 13% of the actual price, while vehicles between Rs 5 lakh-Rs 10 lakh need to pay 14% road tax. The state 17% tax for cars between Rs 10 lakh-Rs 20 lakh and 18% for those above Rs 20 lakh.
The state also boasts of maximum public electric-vhicle charging stations. As per media reports, there are 698 operational charging stations in Karnataka. The state is followed by Maharashtra and Delhi which account for 660 and 539 charging station respectively.
India is among a handful of countries that support the global EV30@30campaign,, which aims for at least 30 per cent new vehicle sales to be electric by 2030.
The government of India has taken various measures to develop and promote the EV ecosystem in the country such as: the remodelled Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme; Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) for the supplier side; the PLI scheme for Auto and Automotive Components for manufacturers of electric vehicles.