SMEV urges Centre to levy additional green tax on ICE two-wheelers

The Society of Manufacturers of Electric Vehicles (SMEV) has called upon the government to levy an additional green tax on two-wheelers with internal combustion engine to incentivise EV adoption and help in the reduction of pollution creating crude oil imports.

The Green tax would also rationalise the expected drop in sales of EV on account of reduction in subsidies starting this month, the industry body representing electric vehicles said in a statement.

SMEV believes that an increase in taxes to the tune of 100 basis points on traditional polluting ICE 2-wheelers will be required to fund subsidies for electric two-wheeler vehicles and put the FAME scheme back on track, it added.

SMEV Director General Sohinder Gill said it is time that the EV sector is allowed to compete at par with ICE vehicles.

"While we are tackling awareness and adoption issues as an industry, the biggest hurdle is the cost of ownership as India is a price sensitive market.

"Additional Green Taxing of ICE vehicles will not only bring EV and ICE at the same level but also encourage bigger OEMs to enter the EV market with confidence and a long-term outlook, which will benefit the country," he noted.

The Heavy Industries Ministry has reduced subsidies on the electric two-wheelers from June 1, forcing companies to hike prices.

From this month, the cap on incentives for electric two-wheelers has come down to 15 per cent of the ex-factory price of vehicles from 40 per cent earlier.

The Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) India scheme commenced on April 1, 2019, for a period of three years, which was further extended for two years till March 31, 2024.