Tesla Asked To Share India Plans Before Getting Tax Breaks

Tesla Inc. is the most valued automotive manufacturer in the world. And there has been significant clamour on Tesla entering India. While Tesla's Indian subsidiary has been registered, the company is yet to begin operations in the country in the right earnest. This means that Tesla cars are yet to go on sale in India, officially. Reports suggest that Tesla had written to the government of India, to Prime Minister Narendra Modi, asking for tax breaks and reduction in import duties along with other sops.

Also Read: Elon Musk Wants To Bring Tesla To India; Huge Import Duties An Issue

(Tesla is yet to begin selling cars in India)

In its communication to the government of India, Tesla asked if the import duty could be reduced from the current 60 - 100 per cent to 40 per cent. In addition, Tesla also asked the government if the 10 per cent social welfare surcharge could be waived off. It is levied on all imported cars and is used to fund healthcare and education programs across the country.

Also Read: Government May Reduce Import Duty If Tesla Agrees To Manufacture In India

(Tesla asked for a reduction in import duties)

But the Ministry of Heavy Industries and Ministry of Finance of the government of India has asked Tesla to increase localisation and share ramp-up plans along with considering local assembly of cars, before any thought can be given on allowing tax breaks.

Also Read: Indian Auto Components Makers Want Tesla's Entry To Benefit Local Companies

(Tesla also asked the Indian government to waive off the 10 per cent social welfare surcharge as well)

In fact, Tesla CEO, Elon Musk, has been quite vocal about the import duties, and has gone on record saying that India has the highest custom duties rate among the big countries of the world and the fact that clean energy vehicles are treated the same way as a petrol or a diesel vehicle, which may not be consistent with India's climate goals. In his earlier tweets, Elon Musk said that Tesla will consider opening a factory in India, if it finds success with imports.

Earlier, the Central Government reduced the goods and services tax (GST) on EVs to 5 per cent from 12 per cent. Moreover, the GST on chargers and charging stations for EVs has been lowered from 18 per cent to 5 per cent, in a bid to boost electrification and encourage global EV manufacturers to set up operations in India.