In a move that could affect electric vehicle (EV) adoption inKarnataka, the state transport department is mulling ending 100% 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 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.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.
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% of the actual price, 14% for Rs 5 lakh-Rs 10 lakh, 17% between Rs 10 lakh-Rs 20 lakh and 18% for above Rs 20 lakh.