EV players seek GST cut on batteries, charging services to boost adoption

GST on batteries and charging services needs to be cut to keep electric vehicles competitive and boost customer adoption, FICCI Electric Vehicle Committee Chair Sulajja Firodia Motwani said on Tuesday.

Speaking at the sidelines of FICCI National Conference on EVs here, she also stressed enhancing PM E-Drive corpus to support enhanced sales of EVs.

"We would be making a recommendation to the GST Council to rationalise the GST taxation on EV-related areas," Motwani said.

Elaborating on the demands, she noted, "Currently the GST on charging services is still 18 per cent which we would request to bring down to 5 per cent so that charging becomes more affordable to the consumers."  Secondly, the GST on batteries should also come down to 5 per cent, Motwani, who is also the founder and CEO of Kinetic Green Energy & Power Solutions, added.

 

"While EVs attract a GST of 5 per cent, GST on batteries is 18 per cent. The request is to reduce it to 5 per cent so that when consumers buy replacement batteries, it is more affordable," Motwani said.

Meeting that these two reforms on GST will help a lot in making EVs more competitive for the consumers, she stated.

While welcoming the PM E-Drive scheme, Motwani said that with rising demand there is a need to review the incentive amounts.

"We believe that because the demand is growing, perhaps the incentive amounts have to be reviewed so that the budget under the PM E-Drive scheme overall is enhanced to ensure that the total number of vehicles sold in the next two years are eligible for the incentive," she stated.

She further said, "We do believe that PM E-Drive has great potential, and it will go a long way in further accelerating electric mobility."  In October this year, the government launched the PM E-DRIVE Scheme, with an outlay of Rs 10,900 crore for faster adoption of electric vehicles, setting up of charging infrastructure and development of EV manufacturing ecosystem in India.

The scheme shall be implemented from October 1, 2024, to March 31, 2026.

Motwani also emphasised that EVs should be part of priority sector lending.

"We do believe there's a strong case to allow and to help having affordable financing for EVs that can make it more cost competitive for not just the classes, but for the masses," she said.

FICCI President and Mahindra Group MD and CEO Anish Shah said electric four-wheelers currently have a 1.5 per cent penetration in India which indicates that "much work is needed".

India has a history of leapfrogging other countries and the discussion shifts to the requirements for achieving this with EVs, he said.

The first requirement is a product that is appealing to consumers, he added.

Manufacturers in India are developing Born Electric products which will help in the adoption of EVs, Shah noted.

Mahindra will launch its grounds up new electric product range later this month, he said.

"While OEMs (original equipment manufacturers) always like asking for subsidies, what we would say is the government has done everything it has to do...it is now up to the industry to now take this forward and enable the transition to electric," Shah stated.