Electric car makers seek cut in batteries' GST from 28% to 12%

New Delhi: Ahead of the GST Council`s next meeting on Saturday, the Society of Manufacturers of Electric Vehicles (SMEV) has called for reducing the GST of 28 per cent on batteries. It has pointed out the anomaly of the higher tax on these when sold separately as against 12 per cent when sold with the vehicles.

"Lithium batteries usually need to be sold separately from the electric two-wheelers to give a choice of the batteries at the point of sale. Such batteries have become significantly costlier because of the 28 per cent GST on them, leading to a big dampener for the electric two-wheeler customers," an SMEV release said on Friday following its annual general meeting (AGM) here earlier this week.

"SMEV is requesting uniform GST rate for EVs (electric vehicles) and batteries at point of sale," it said.

At its meeting with the Department of Heavy Industry (DHI) and NITI Aayog officials, the SMEV emphasised the need for incentives and appropriate policy measures to encourage wider use of electric vehicles in the country. 

"Short-term measures and incentives for the existing manufacturers are the need of the hour," SMEV Director (Corporate Affairs) Sohinder Gill said in a statement.

"The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India scheme is expiring this month and we request the government to announce its continuation at the earliest," he added. 

The FAME scheme, extended earlier for six months till September-end provides incentives for purchase of electric and hybrid vehicles in particular areas.

The SMEV also called for prioritising the development charging infrastructure, which is mostly limited to the private sector.

"The government needs to build a robust charging infrastructure for mass usages of EVs," the statement said. 

Meanwhile, Heavy Industries Minister Anant Geete has said that the government is considering the extension of the FAME scheme by six more months. 

"Most likley, we will extend it for another six months after the end of September. Earlier, the phase one of the FAME scheme was extended by six months," Geete said at the 57th SIAM Annual Convention here on Thursday.