Finance Minister Mahat Denies Leaking Information on Tax Increase for Electric Vehicles

Finance Minister Dr Prakash Sharan Mahat answering questions raised by opposition MPs in the session of House of Representatives (HoR) to hold discussions on the earlier announced budget, on Tuesday. Courtesy: RSS

Finance Minister Dr. Prakash Sharan Mahat has refuted claims that he leaked information regarding the increase in tax on electric vehicles during the budget preparation. He emphasized that individuals who purchase cars based on assumptions of potential tax hikes cannot hold him responsible.

During a session with MPs on Tuesday, Finance Minister Mahat defended his decision to implement a cautious approach to taxing electric vehicles. He mentioned that businesses might have procured vehicles in anticipation of annual tax increases during budget announcements.

The Finance Minister asserted that his revised tax structure for electric vehicles would discourage people from opting for petroleum-fueled vehicles. He highlighted that the tax on electric vehicles remains significantly lower compared to conventional petroleum vehicles. He confidently stated, "With these tax adjustments, nobody will abandon electric vehicles and switch to petroleum-based vehicles."

Rastriya Prajatantra Party MP Gyandendra Bahadur Shahi raises questions for the Finance Minister in HoR session on Tuesday. Courtesy: RSS

Earlier, Rastriya Prajatantra Party MP Gyandendra Shahi had alleged the Minister of leaking the information regarding tax hike on EVs and the opportunity was capitalized by middlemen to import 1100 EVs that had resulted in loss of Rs. 90 crores in revenue to the state. 

Earlier, unveiling the budget on Jestha 15, Finance Minister Dr. Prakash Sharan Mahat had announced to restructure the existing tax laws with regards to import of electronic vehicles (EVs).

Earlier, EVs of up to 100 KW capacity were obliged to pay 10 per cent custom tax while were exempt from paying any additional taxes.

The new arrangements has categorized 50-100 KW capacity EVs for 15 per cent custom tax after increasing it by five per cent and adding 10 per cent excise duty.

Similarly, the excise duty and custom tax (for 100-200 KW capacity) earlier has been deduced by 10 per cent. Earlier, for the 100-200 KW capacity EVs custom tax and excise duty was set at 30 per cent which has now been reduced to 20 per cent each.

For the electric vehicles of 200-300 KW capacity, a five percent deduction in custom tax from 45 per cent to 40 percent has been set.

Similarly, for EVs of the same capacity, excise duty has been maintained stable at 45 per cent.

Meanwhile, for electronic cars, jeeps and vans of more than 300 KW capacity, 60 per cent custom tax and 60 per cent excise duty has remained stable.