In a move that could affect electric vehicle (EV) adoption in Karnataka, the state transport department is mulling ending 100 per cent road tax exemption given to battery-run vehicles. If approved, EVs will be costlier in the state.
Sources in the transport department said discussions are going on to include this proposal in the upcoming budget. “By 2030, a significant number of vehicles will be electric, especially in Bengaluru. Motor vehicle tax is one of the major revenues of the state government and any shortfall will affect infrastructure and social welfare schemes. There will be a separate tax slab for EVs. But talks are in early stages. The state government will have to approve the proposal,” the sources said.
When contacted, transport commissioner SN Siddaramappa said, “EVs will have to reach a threshold. It’s still in the discussion stage.”
Karnataka has more than two crore registered vehicles of which EVs are only 1.5 lakh till December. Between May and December 2022, 61,598 EVs were registered in the state.
In March 2016, the state government exempted all EVs from paying road tax. In Karnataka, however, only road tax exemption with no registration fee is given to EV customers. Many other states/UTs offer financial subsidies for EVs along with road tax exemption.
Karnataka is also the first state in the country to come up with an Electric Vehicle and Energy Storage Policy in 2017. Experts fear a move to impose MV tax on EVs is likely to discourage prospective buyers. Many are reluctant to shift to EVs due to the high initial cost and inadequate number of charging stations.
Pawan Mulukutla, director (energy technology and green mobility) at World Resources Institute India, an NGO said: “At present, Karnataka is giving only road tax exemption and no financial subsidy is given to EV owners. If the 100 per cent road tax exemption is withdrawn what is the incentive for vehicle users to shift to EVs? The road tax exemption should continue till sales of EVs touch around 20 per cent of the total vehicles. EV sales are only picking but it has not grown to a huge percentage,” he said.
Registration charges have already been waived for all EVs across the country. In August 2021, Union ministry of road transport and highways (MoRTH) announced all battery-operated vehicles are exempt from ‘the payment of fees for the purpose of issue or renewal of registration certificate’.
At present, Karnataka imposes the highest road tax for non-EVs in the country. For cars below Rs 5 lakh, for instance, it is around 13 per cent of the actual price, 14 per cent for Rs 5 lakh-Rs 10 lakh, 17 per cent between Rs 10 lakh-Rs 20 lakh and 18 per cent for above Rs 20 lakh.
1.5 lakh EVs in Karnataka
Statistics show 18 lakh EVs have been registered across the country so far. Of this, Uttar Pradesh tops the list with 4.1 lakh e-vehicles followed by Delhi (1.8 lakh), Maharashtra (1.7 lakh), Karnataka (1.5 lakh), Rajasthan (1.2 lakh), Bihar (1.1 lakh) and Tamil Nadu (1 lakh). Of the 1.5 lakh e-vehicles, are 1.2 lakh (two-wheelers), 9,265 (cars), 7,105 (autorickshaws) and others.
Karnataka has maximum public EV charging stations
Records show that there are 5,151 operational Public EV charging stations (PCS) across the country. Of this, Karnataka has the maximum with 698 followed by Maharashtra (660), Delhi (539), Tamil Nadu (439) and Uttar Pradesh (406).
