The GST Council’s fitment committee has rejected the industry’s proposal for the reduction in the goods and services tax (GST) rate on electric vehicles (EV) batteries, as per a report by CNBC-TV18. The EV industry had proposed a reduction in GST from 18 percent to 5 percent, however, the council has rejected the same.
The GST Council’s fitment committee consists of revenue officials from both the Centre and states and is of the view that lithium-ion batteries have numerous uses in mobile phones, portable electronics, and electric vehicles amongst others, as per sources.
What is also to be noted is that fully-built EVs are subjected to 5 percent GST while lithium-ion batteries and charging stations fall under the 18 percent GST bracket.
The development comes days after Nitin Gadkari asked why buses and trucks can’t run on ethanol at the SIAM event. He also complimented them on the increase in alternate fuel vehicles and EVs. Gadkari said, “Seven years ago, I told companies to transition to electric vehicles, those who haven’t done so have seen a drop in market share today. Appropriate decision and timing are very important for the auto industry,”
The Ministry of Heavy Industries had announced a modification in the FAME II scheme and reduced the subsidy on electric two-wheelers to Rs 10,000 per kWh from Rs 15,000 per kWh and the maximum subsidy cap from 40 percent to 15 percent.
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