KATHMANDU, July 30: The Supreme Court on Wednesday issued a show-cause order against the government decision to raise the taxes on electric vehicles.

The government, through its budget for 2020/21 has increased the customs duty from 10 to 80 percent and excise duty from five percent to 80 percent. In the revised rate, the cost of electric vehicles has surged multifold, according to the traders.

A single bench of the Supreme Court Justice Ananda Mohan Bhattarai issued a show-cause order showing concern on the tax hike in electric vehicles as a serious matter. This came in response to a writ petition filed by Jury Nepal, a non-government organization, against the government move, stating that the rise in tax had made electric vehicles unaffordable to the general people.

The provision to raise tax on electric vehicles has drawn widespread criticisms as this seeks to discourage the use of environment-friendly automobiles. The government move has also been criticized on the ground that it will hit the aspiration of making the country self-reliant in energy supply and reduce the ballooning trade deficit.

However, the government has been defending its move saying that it was compelled to revoke the scheme to check misuse of the government package in surging imports of luxury cars. In addition, the government also put forth that it had to revisit the tax rates to finance Rs 11.62 billion that the budget has announced in subsidies to the electricity users.