India Energy Storage Body Calls For GST Cut On Batteries, EV Infrastructure

Industry body India Energy Storage has called for a reduction in the goods and services tax on batteries, electric vehicle charging infrastructure services, and battery swapping. Ahead of the India Energy Storage Week 2024 in New Delhi from July 1-5, IESA submitted a wishlist to the government, including the expansion of production-linked incentive schemes for battery components and raw materials processing.

"Lithium-ion batteries are currently taxed at 18% GST, while other batteries are at 28%. We want all batteries to come under the 18% GST bracket. Charging infrastructure and battery swapping services should be reduced to 5% or 18% from the existing 28%," said IESA President Rahul Walawalkar in the statement.

Walawalkar praised government initiatives like the Advanced Chemistry Cell (ACC-PLI), Auto-PLI, and Auto Components PLI schemes. He suggested expanding these PLI schemes to cover battery components and raw materials processing, supporting battery recycling initiatives, and collaborating with international partners to secure critical raw materials.

IESA urged the government to continue incentivising large-scale battery storage system deployment and supporting research and development to enhance performance and reduce costs. The organisation noted that while the EV market is growing, additional support is needed to address barriers such as the lack of charging infrastructure and high upfront costs.

IESA's recommendations included streamlining regulatory processes and providing clear guidelines for clean energy projects to facilitate faster implementation and reduce uncertainties for investors. It also highlighted the need for innovative financial mechanisms and incentives for private sector participation to overcome the major barrier of accessing affordable financing for clean energy projects.

Greater emphasis on research and innovation is necessary to reduce costs and improve the efficiency of clean energy technologies. Public-private partnerships can play a vital role in this area. Additionally, the industry body suggested raising public awareness about the benefits of clean energy and investing in skills development programs.