In order to achieve the government’s goal of 30% EV adoption by 2030, Prime Minister Tarun Kapoor, an advisor, stated that the GST on EV batteries and charging infrastructure must be reduced.
Speaking at a FICCI event titled “Electric Vehicles – Accelerating E-mobility: Enablers and Imperative” in New Delhi, Kapoor stated, “The government is fully supportive of four-wheelers, and there is a need to look at GST on batteries and charging stations.” “We need to look at the taxation on batteries, and also, if someone provides charging as a service, then as a service, the GST becomes higher, so this has already been flagged to the concerned authorities,” the top government official stated.
Taxation on Batteries and EV charging services
Batteries and charging services are currently subject to an 18% GST rate. Since the GST Council makes decisions on GST, Kapoor noted that the government does not directly decide on the matter, although he did say that higher GST on EV-related services “probably needs to be corrected. The “complete replacement” is what we need to look for, he continued, adding that India should have much greater goals in the EV two-wheeler market. In certain cities, the switch must be 100% on three-wheelers as well. Given that trucks use a lot of diesel, Kapoor added, electrification of trucks must also be completed quickly.
There are a lot of conversions in one huge go because we can convert some routes with charging infrastructure and some large customers, like mining firms or industries like steel and cement, where a lot of trucks are deployed. The administration is aggressively working to electrify all ambulances in the nation, he noted. According to the prime minister, ambulances ought to be modified. I asked industry to build some quality ambulances, so that’s one area where the government will give money,” he remarked.
Sulajja Firodia Motwani, Chair of the FICCI EV Committee and Founder of Kinetic Green, also advocated for a number of changes that may help the Indian EV sector. She demanded that money be replenished for three-wheelers under the PM E-Drive Scheme. The scheme’s allocations are already starting to run their course.
We’ve already ran out of funds for three-wheelers, which only indicates how well the plan has been welcomed. “We would like to encourage MHI to consider extending the program and to set aside more funds for this green dream,” she added. Several “irritants” on the internet portal need to be simplified, she continued.
She also agreed with Kapoor that batteries should be exempt from GST. “Battery GST should be lowered to 5%. Additionally, the GST on charges must be lowered to 5%. “This will help OEMs reduce fund blockage due to the inverted duty structure,” she said, adding that it will make charging and battery replacement more inexpensive for our customers. She also asked for EVs to be included in lending from the private sector.
