Another Setback for Tesla as Centre Rejects Tax Break

Story Highlights
  • Centre denied Tesla's demand for tax break down.
  • Advised Musk to import partially built vehicle units.
  • Tesla expressed desire to sell vehicle in India in October 2019.

Turning down the tax break demand, Tesla Inc is welcome to India if they commit to local manufacturing, assembling, and sourcing norms, a senior finance ministry official said on Friday. The centre has asked the American electric vehicle and clean energy company to import partially built units instead of fully built units that attract heavy tax.

The official said, “If Tesla or other firms need a concessional tax rate structure for electrical vehicles, they will have to give a commitment to do some local manufacturing, assembling, and sourcing.”

Vivek Johri, Chairman of the Central Board of Indirect Taxes and Customs in an interview on Thursday clearly stated that the centre would not re-jig the taxes as some domestic production of some foreign investors is happening in India. Moreover, it asserted several foreign EV firms were selling their product with the current tariff.

Tesla Chief Executive Officer Elon Musk has requested India to lower taxes and also allow the company to first sell vehicles built elsewhere at a competitive price. The firm is yet to plan its local manufacturing and procurement plan from India.

Politicians from five Indian states have invited Tesla to set up their outlets in their region after Musk faced challenges with the federal govt.

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