Reducing the Goods and Services Tax (GST) on EV batteries and charging services is essential to maintaining EVs’ competitiveness, according to Sulajja Firodia Motwani, Chair of the FICCI Electric Vehicle Committee.
Call for EV Component GST Rate Rationalization
Speaking on the sidelines of the FICCI National Conference on EVs, Motwani drew attention to the disparity in GST rates. According to him, batteries and charging services are subject to an 18% tax, but EVs are only subject to a 5% GST. “The GST on batteries and charging services should be lowered to 5% in order to make EVs more affordable for consumers, she said.
Lowering the GST on replacement batteries, for example, might significantly cut customer costs.
Enhancing the PM E-Drive Initiative
Motwani also underlined the need to increase the PM E-Drive program’s corpus in order to meet the growing demand for EVs: “With rising sales, we recommend revisiting incentive amounts to ensure the scheme supports a larger number of vehicles,” she stated. She called for a review to ensure that the funding of the plan keeps pace with demand over the next two years.
Offers for Priority Sector Lending Cost-effective Financing
“With the help of affordable financing, EVs will become cost-competitive, not just for the elites but for the masses,” Motwani said, underscoring the importance of funding and urging decision-makers to prioritize financing this industry.
The Industry’s Role in Accelerating EV Adoption
Anish Shah, MD & CEO of the Mahindra Group and President of the FICCI, reaffirmed the importance of collaboration in encouraging EV adoption: Shah noted that only 1.5% of the Indian market is made up of electric four-wheelers, saying that “there is still a lot of work to be done.”
He noted that producers are creating “Born Electric” products meant for mass adoption and underlined the need to promote EV products to increase demand.
Shah added that Mahindra will launch its new range of electrified products later this month. He commended the government’s actions and stated, “The industry must now spearhead the shift to electric mobility. The government has done its share.”
