Union Budget 2023 gives EVs a big charge; boosts vehicle scrappage

Centre and states to provide 25% tax rebate on road tax for vehicles purchased to replace scrapped ones

Finance minister Nirmala Sitharaman, in her Budget speech on Wednesday, focussed on green energy and electric vehicles. Sitharaman extended Customs duty exemption for the manufacture of lithium-ion batteries and introduced more sops to boost vehicle scrappage.

She also announced viability gap funding (VGF) for battery energy storage system (BESS) projects with a capacity of 4,000 MWh.

On the other hand, Customs duty on premium vehicles that come in completely-built units (CBUs) has been hiked to 70 per cent. These include cars costing less than $40,000 or with engine capacity less than 3,000 cc for petrol vehicles and less than 2,500 cc for