Need To Relook GST On EV Batteries, Charging Infra, Says PMO Adviser

The government is keen on taking electric vehicle penetration to 30% by 2030, and in that pursuit, there is a need to lower GST on batteries for EVs and charging infrastructure, according to Tarun Kapoor, advisor to the Prime Minister.

"On four-wheelers, government is fully supportive and there is a need to look at GST on batteries and charging stations,” Kapoor said while speaking at a FICCI event named 'Electric Vehicles – Accelerating E-mobility: Enablers and Imperative' in New Delhi.

"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 senior bureaucrat said.

Currently, batteries and charging services face an 18% GST rate.

Kapoor added that the government doesn't make a direct decision on GST, since it goes through the GST Council, but he added that higher GST in terms of EV-related services "probably needs to be corrected."

He added that in EV two-wheeler segment, India should have much higher targets and a "complete replacement" is what we have to look for. On three-wheelers as well, the switch has to be 100%, at least in some cities, he said.

Kapoor added that electrification in trucks also needs to be done soon, given that they are large consumers of diesel. "We can convert certain highways, with charging infrastructure, and some large users, like mining companies, or industries like cement and steel, where large numbers of trucks are deployed, so there are large numbers of conversions in one big go."

He pointed out that the government is actively looking to electrify all ambulances in the country. "The prime minister has said that ambulances should be converted... I requested that industry must develop some good ambulances...so that is one area where government would provide funds," he said.

FICCI's EV Committee Chair and Kinetic Green Founder, Sulajja Firodia Motwani, Chair, FICCI, also called for a host of tweaks that could boost the Indian EV market.

She called for a repletion of funds in the PM E-Drive Scheme for three-wheelers.

"Allocations under the scheme are already beginning to exhaust themselves. For three-wheelers, we've already run out of money, and that just means that the scheme has been very well received. And we would like to urge MHI to look at an extension of the scheme and to allocate higher budgets toward this green dream," she said.

She added that there are some "irritants" on the online portal that should be streamlined. She echoed Kapoor's thought on GST reduction in batteries as well.

"GST on batteries needs to be reduced to 5%. And also, GST on charging needs to be reduced to 5%. This will make charging more affordable for our consumers, and it will make batteries more affordable for replacement," she said, adding that this will help OEMs reduce fund blockage due to the inverted duty structure. She also requested EVs to be a part of private sector lending.