Electric vehicles (EVs) are likely to be dearer by over 10 percent after the government hiked the customs duty on the eco-friendly cars by as much as 20 percent, say the automobile dealers.

The government through the annual budget for the next fiscal year has revised the rates of customs duty and excise duty on the import of EVs. Finance Minister Barsha Man Pun said the customs duty on EVs of up to 50 kW capacities has been increased to 15 percent from 10 percent, while a five percent excise duty has been slapped on these products.

Likewise, the government has increased both the customs duty and excise duty on the EVs in 50-100 kW by five percent. As per the revised tariffs, customs duty on EVs has been increased to 20 percent from 15 percent, while the excise duty has been increased to 15 percent from 10 percent.

Meanwhile, the customs duty on EVs of 100-200 kW has been raised to 30 percent from 20 percent. Likewise, those in categories of 200-300 kW and more than 300 kW will be subjected to pay customs duty of 60 percent and 80 percent, respectively. In these vehicles, the indirect tax has been raised by 20 percent each.

Similarly, EVs of up to 10-seat capacity will be paying 15 percent customs duty, up from 10 percent, while a 5 percent excise duty has also been introduced in the electric cars of this type.

Rajan Babu Shrestha, vice-president of NADA Automobile Dealers Association said the small electric cars will be expensive by at least 12 percent with the latest development.

Apart from the EVs, the government has also slapped a two percent road charge on petroleum based four-wheelers. Akash Golchha, senior vice-president of NADA, said the provision of new taxes could backfire in the context that the government aims to generate more tax revenue from the sector.

Revenue Secretary Ram Prasad Ghimire, however, said that the government made revision this time on EVs which were subjected to pretty low taxes. “After carrying out a thorough study of the segment, the government decided to revise the taxes on the EVs,” Ghimire said.