The GST on electric car batteries has been reduced by 10 percent by the Government of India. The Government reduced the GST on Lithium – ion battery to 18 percent from 28 percent along with reduction in GST on fuel cell vehicles is 12 percent from 28 percent. The 10 percent reduction in GST on the electric batteries is aimed at increasing sales of electric vehicles in the country.
The decrease in GST on the electric car batteries will bring down the costs to the electric vehicles to 8 percent – 10 percent because the electric car batteries are an expensive part of the electric vehicle. Therefore the electric vehicles become more affordable for the Indian customers. At present, the manufacturers of the electric vehicles depends on the imported battery packs but the during the 2018 budget session, the import duty on Lithium ion batteries were increased to 20 percent from 10 percent. Therefore the reduction in GST on electric batteries urges the manufacturers to develop lithium ion battery packs in our country.
Presently there are only two manufacturers of electric vehicles in India – Mahindra and Mahindra and the Tata Motors. Tata Motor brings the new Tata Tiago Electric. The eVerito sedan and the e20 Plus hatchback by Mahindra and Mahindra are on sale electric vehicle in India. But with the reduction in GST, the costs of the electric vehicle will not decrease immediately. The electric car batteries and other components are sourced in advance so it is not likely that the costs of the electric vehicle reduce all of a sudden. The prices of the electric vehicles will be reduced only when only the manufactures implement the fresh batch of electric car batteries, those have got a reduction of 10 percent in GST.
The Ministry of Road Transport had brought this proposal of lowering the cost of electric car batteries to increase the nomination of electric vehicles in India. Besides that the Ministry of Road had put forward a number of proposals including green number plates for electric vehicles, preferential parking and scrapping permits to run commercial electic vehicles, that exempts the youth between the ages of 16 years – 18 years riding electric scooters from license. All these proposals were put forward to increase the production and sales of electric vehicles.
Subscribe to our Youtube Channel