Manufacturers of Electric Vehicles demand uniform 5 % GST on EV spares
The Society of Manufacturers of Electric Vehicles (SMEV) demands uniform 5 per cent GST on spare parts for electric vehicles.
SMEV pointed out that while 5 per cent GST is levied on electric vehicles, for spare parts, there is no clarity and the industry ends up paying 28 per cent, except for batteries.
In its pre-Budget recommendations, the industry body also sought extension of subsidies for EVs under the FAME II scheme and an inclusion of light to heavy commercial vehicles in the scheme to promote electric mobility.
Light commercial vehicles (LCV) and medium and heavy commercial vehicles (M&HCV) should also be included in the scheme on a project-mode basis as India must prepare for the transition to e-mobility in trucks and heavy commercial vehicles in three to four years, SMEV said in a statement.
“The validity of FAME II is set to expire on March 31, 2024. We believe FAME’s validity needs to be extended since we have yet to meet the penetration the subsidy was supposed to catalyse,” it added.
SMEV also pointed out that new FAME II scheme should be linked to e-mobility conversion rather than being time-based.
The market trends suggest that e-mobility, particularly electric two-wheelers (E2W) has the potential to continue growing once it reaches 20 per cent of the total two-wheeler market. “The subsidy can be tapered thereafter,” it highlighted.
The EV Industrial body also suggested for the implementation of provisions to directly transfer the subsidy to customers.
It also said the PLI (production linked incentive) scheme drafted for promotion of electric mobility “is not designed for startups and MSMEs to benefit from it” and asked for their inclusion in the PLI ambit.
For EV penetration, a critical requirement is to enable a wide network of charging infrastructure. The government is required to provide a CAPEX subsidy of 50 per cent for setting up charging infrastructure across the country,” SMEV added.
The Union Budget 2023-24 will be presented by the Union Finance Minister Nirmala Sitharaman in the Parliament on February 1, 2023.
