Bengaluru, April 2: Karnataka government has decided to withdraw the tax exemption extended to electric vehicles, which was introduced to promote cleaner mobility.
New tax structure for EV four-wheelers
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While the two wheelers continue to enjoy the facility, the four wheelers tax structure will range from 5% to 8% of the vehicle costs, depending on the price of the vehicle.
Cars priced up to ₹ 10 lakh will pay a lifetime tax of 5%, while the cars priced between ₹ 10 lakh and ₹ 25 lakh will pay 8% of lifetime tax. The cars priced above ₹ 25 lakh will pay a tax of 10% road tax.
Policy shift raises concerns over EV adoption
The move marks a significant policy shift and has sparked concerns over potential impact on EV adoption.
The vehicles already registered will pay between 93% and 25% of lifetime tax, based on their age. The vehicles registered within the last two years will pay 93% of lifetime tax, while 15-year-old vehicles pay 25% lifetime tax.
Legislative process and expanded tax scope
To enable new taxation, the government has introduced a bill, which has already been passed in the Legislative Assembly. It has to be passed in the Legislative Council before coming into force.
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Revenue expectations from revised tax structure
The government is expected to mop up additional revenue to the tune of ₹ 250 crore from the revised tax structure.
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