Need To Lower GST On EV Batteries, Charging Infra: PMO Advisor

Advisor to the Prime Minister, Tarun Kapoor, has reportedly underscored the need to lower goods and services tax (GST) on electric vehicle (EV) batteries and charging infrastructure to increase EV penetration in the country. 

“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,” said Kapoor as per NDTV Profit. 

It is pertinent to note that EV batteries and charging services attract a GST rate of 18%.

Speaking at an event in New Delhi, Kapoor reportedly added that while the government does not directly make decisions with regards to GST (GST Council does), higher tax levy for EV-related services “probably needs to be corrected”.

The PMO advisor also said that the government should set higher targets for the two-wheeler segment to switch completely to EVs, adding that “complete replacement” is what the country should look for. 

For three-wheelers, he said that the focus should be on electrifying 100% of the vehicles, at least in some cities. Kapoor added that trucks should be electrified at scale too and “soon” as 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 reportedly added.

The advisor to the PMO also highlighted that the Centre 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 (the) government would provide funds,” he added. 

The push comes at a time when the Centre is actively pushing to fuel the growth of the homegrown EV ecosystem with sops and incentives such as production-linked-incentives (PLIs) and the INR 10,090 Cr PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme. 

As per an Inc42 report, the homegrown EV space is projected to become a $110.74 Bn market by 2029.

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