Govt Seeks Detailed Manufacturing, Sourcing Plans From Tesla Before Considering Tax Breaks

The government is said to have asked Elon Musk-led Tesla to ramp up local procurement and to share the detailed manufacturing plans before considering the US electric carmaker’s demand for lower import taxes on electric vehicle, reports The Economic Times.

The Union Ministries of Finance and Heavy Industries are said to have sought the details from the company during a meeting earlier this month. The government has reportedly also asked Tesla for its thoughts on importing fully built cars versus so-called knocked-down units or partially built vehicles, which attract a lower import levy.

The development comes after Tesla had in July written to the government asking for reduction of import duty on electric cars to 40 per cent from the current 60-100 per cent.

The company had then also asked the government to scrap the 10 per cent social welfare surcharge which is levied on all imported cars and helps fund health and education programs.

It should be noted that Musk has repeatedly complained that Indian rules prohibit him from testing the waters first with imports, as high duties make Tesla cars ‘unaffordable’.