Go Back04-Oct-2023
There will be no reduction in the goods and services tax (GST) rate on electric vehicles (EV) batteries as the GST Council’s fitment committee has rejected the industry’s proposal, sources told CNBC-TV18.The EV industry had sought a reduction of GST on batteries from 18% to 5%, however, the fitment committee has recommended maintaining a status quo on the rate.
GST Council’s fitment committee, which comprises revenue officials from both the Centre and states, is of the view that Lithium-ion batteries have multiple uses that is, in cellular mobile phones, portable electronics, and electric vehicles etc, sources said.
It must be noted that
built-up EVs are subject to a 5% GST, but lithium-ion batteries are subject to an 18% GST and charging stations are charged GST at 18%.
"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," he said.
The Ministry of Heavy Industries, in its recent notification, announced a modification in the FAME II (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) II scheme and dropped the subsidy on electric two-wheelers to Rs 10,000 per kWh from the existing Rs 15,000 per kWh and the maximum subsidy cap from 40% to 15%.
CNBC TV18