Finance Minister Prakash Sharan Mahat has said the tax rates of the budget for the upcoming fiscal year have been proposed in a scientific method.
Responding to queries raised by lawmakers during the general discussions on the annual estimates of revenue and expenditure for the fiscal year 2023/24 in the second meeting of the National Assembly on Friday, he argued taxing electric vehicles and imposition of value added tax (VAT) on daily consumable goods will not hit the general public.
“A narrative is being tried to create that the common man has been affected due to the increment in tax on electric vehicles and imposition of VAT on onion, potatoes and apples. Do not be misled by this,” the Finance Minister said and argued that the tax on EVs has been maintained in a logical manner and it is not increased. “EVs with lower capacity are charged tax at lower rate while those with greater capacity higher tax rates and EVs more than this capacity have been taxed higher.”
Stating that nobody would opt for petroleum-based vehicles instead of EVs due to this taxation rate, he said this has been ensured in the budget. “Make a comparison. The rate of tax on EVs is far less than that on the lower-order petroleum-based vehicles. We have managed the tax rate in such a way that the revenue would not be too much low and the promotion of EVs would also not diminish,” Finance Minister Mahat reiterated.
According to him, lower tax rates has been proposed on EVs as now we have to promote the EVs, decrease the consumption of petroleum products and increase the use of electricity in the transport sector.
“No change has been made in this policy,” he said, adding that it was he who proposed a general increase in the tax rate for EVs. “Will I leak the information on increase in tax rate when I myself have proposed an increment in tax rate? If I was in favour of the traders I would have retained the same tax rate,” he stated.
He made it clear that there was no chance to decrease tax on EVs and it would not be decreased. “It will either remain what it is or else it will increase to some extent,” the Finance Minister said.
Stating that the vested interest group has made a hullabaloo on the topic of increase in the tax on EVs, he said this group was venting ire at him as they were reaping profit of millions from a single vehicle and as the new provision would reduce their ‘income margin’.
