Govt's electric vehicle push: One-day registration with fee waiver being explored

Dhirendra Tripathi

Moneycontrol News

The government is exploring various options that could form part of its proposed policy on electric mobility to popularize the use of these vehicles and promote their local manufacturing, according to a senior official involved in decision-making.

One of the ways it is looking at is immediate registration of the vehicle and waiver of the registration fee. It is also working on framing policy for a national intelligent transportation system in the country.

A Cabinet note for inter-ministerial discussion on the proposed guidelines in the policy has been circulated by Niti Aayog, the official said.

“The proposed policy envisages that the vehicle buyer will get a registered vehicle immediately from the time he gets the possession,” he said. The same process currently takes two to four days.

The policy is also likely to suggest waiver of registration fees. Registration fee is a state subject and not part of Goods and Services Tax. Expectedly, it varies from state to state. It is usually levied as a percentage of the ex-showroom price of the vehicle. Diesel vehicles attract a higher registration charge for two reasons -- their factory price is anyway higher and the states otherwise also charge a higher percentage of registration charge on them.

Typically, petrol cars costing below a certain threshold attract the least registration tax. The rates can vary from 4% to 15%.

In line with the government’s ‘Make in India’ policy and to encourage local manufacturing of electric vehicles and development of ancillary industry, the government may also tax royalty payments by Indian companies to their foreign partners.

Asked if the tax on royalty payments wasn’t going to discourage technology transfer and ensure that critical components like the battery continued to be imported, the official replied in the negative.

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“India is going to be among the biggest markets for electric vehicles, possibly number two after China. Currently, royalties are paid and very little technology transfer happens. The tax will ensure that the Indian partner gets the technology over the years,” the official said.

The government desires to stop manufacturing of petrol and diesel vehicles by 2030 and only allow manufacturing of electric vehicles. This is only an intent of the government and not a policy decision yet with the industry stiffly opposed to the idea of shutting all manufacturing of vehicles running on combustion engines.

The official said the Ministry of Road Transport and Highways and Niti Aayog were collaborating with the International Road Federation to frame a policy for intelligent transportation in the country. A committee had been formed to study and explore ways for introduction of such systems here, he said.