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Having watched the solar sector stomach similar scares year after year, one braces for a repeat. The Finance Bill presented on Friday, for once, does something far more sensible.
What the budget actually did
All exemptions under the Automotive Industry Development and Export Policy (AIDEP) 2021-26, which were due to lapse on June 30, have thankfully been extended for another year till June 30, 2027. The sales tax exemption for completely knocked-down kits for locally assembled electric vehicles remains. The excise exemption stays. The customs concessions stay. The locally assembled electric car that a middle-class family has been eyeing pays nothing new.
New taxation has instead been reserved for the very top. As per the bill, imported fully built electric cars, SUVs, and pickups will now attract a levy based on import value: zero per cent up to Rs20 million, 30pc between Rs20 and Rs30m, and 40pc above that. Imported petrol cars between 2,000cc and 3,000cc face a 40pc excise (41pc above 3000cc), with electric vehicles exempted till June 2027. Hybrids, thankfully, have been left untouched.
