Govt. increases tax on electric vehicles, gas guzzlers back in demand


The government has revised the tax rate on electric vehicles. Although the government had earlier given priority to electric vehicles to reduce the consumption of petroleum products, it has decided to levy 40 percent customs duty and 30 to 40 percent excise duty on the basis of engine capacity from the budget of the coming fiscal year 2077/78. The government has maintained 80 percent customs duty on electric vehicles and given 50 percent discount.

Earlier the government had levied 10 per cent customs duty, 13 per cent VAT and only 4 per cent road duty on electric vehicles. Through the new budget, the government has imposed 30 per cent excise duty on cars with 50 kW engine capacity, 40 per cent excise duty on cars with 50 to 100 kW engine and 50 per cent excise duty on cars with 100 to 150 kW.

Similarly, excise duty will be 60 per cent on electric cars with a capacity of 150 to 200 kW, 70 per cent on cars between 200 and 300 kW and 80 per cent on cars above that.

Cabinet Shrestha, managing director of Agni Group, the official seller of Mahindra vehicles in Nepal, stated that the government has increased customs and excise duty on electric vehicles as per its policy. “The government has been giving priority to electric vehicles to reduce the consumption of petroleum products and increase the use of electricity,” he said, “but the government’s budget speech yesterday proved the opposite.” He also informed that the sales of electric vehicles in Nepal will be very low these days. “Electric vehicles are more expensive than other vehicles,” he said, adding that “there is no way to buy them after the government imposes high excise and customs duties on them.” He also said that it would be a loss to both the consumers and the government.

“This policy has discouraged those who are thinking of buying electric vehicles and has made such vehicles out of the reach of the public,” another Auto Dealer said. He said it was unfortunate that the government had come up with a policy to discourage more environmentally friendly and economically viable electric vehicles.

With the new government policy to increase tax on electric vehicles prices would go up by at-least 100 percent . Electric vehicles previously being sold for around Rs 50 Lakhs will now cost around Rs 1 crore in Nepali market. With such high prices, consumers will have no option than to revert back to same old gas guzzlers.

Excise Duty on Electric Vehicles Revised

Electric Motor Capacity Excise Duty
50 KW 30 percent
50-100 KW 40 percent
100-150 KW 50 percent
150-200 KW 60 percent
200-300 KW 70 percent
300 KW above 80 percent
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