New Delhi,nov 19
Goods and Serives Tax on batteries and charging infrastructure should be brought down from 18 per cent to 5 pc to make replacements “more affordable” in line with “supportive” GST on electric vehicles, said Sulajja Firodia Motwani, Chair of FICCI’s Electric Vehicle Committee and founder and CEO of Kinetic Green Energy and Power Solutions.
In an exclusive interview with ANI, Motwani stated, “The Government of India has provided substantial support to the EV sector by levying only 5 per cent GST on electric vehicles, making them more affordable compared to the 28 per cent GST on petrol and diesel vehicles. However, the 18 per cent GST on batteries and charging infrastructure remains a significant challenge. We believe charging services should also attract 5 per cent GST to lower costs for consumers. Similarly, reducing GST on batteries to 5 per cent would make replacements more affordable.”
Motwani explained that the disparity in GST rates creates inefficiencies for manufacturers. “EV makers pay higher input GST (18 per cent) on batteries but charge lower output GST (5 per cent ) on vehicles, leading to blocked funds that require refunds from the government. Since batteries account for about 50 per cent of a vehicle’s cost, aligning the GST on batteries with that of vehicles will ease cash flow issues for manufacturers, especially startups, while reducing costs for consumers. We will be presenting this demand to the GST Council shortly.”
Motwani praised the government’s commitment to e-mobility, noting significant progress. “In 2021, EV penetration in India was just 0.9 per cent. By 2024, it has reached nearly 8 per cent, and the goal is to achieve 30 per cent penetration by 2030. This transformative shift will require nearly all two-wheelers and three-wheelers to transition to electric. Such a move will reduce urban pollution, enhance fuel security, and position India as a global leader in e-mobility.”
She highlighted the proactive role of various stakeholders. “The government has consistently supported the sector, and we’ve seen strong encouragement from government. It’s not just about transitioning, it’s a technological transformation that can make India a producer and innovator, not just a consumer. This vision is critical for global leadership and sustainable growth.”Addressing the PM eDrive scheme, Motwani remarked, “The scheme has been well-received, but the allocated budget may be insufficient to meet the rising demand. The surge in EV sales means some subsidy slabs for two-wheelers and three-wheelers might run out sooner than expected.
