Electric vehicle makers seek GST rate cut to push growth

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The electric vehicle (EV) industry, which is slowly limping back to normalcy after being severely affected by the Covid-19 pandemic, expects a lot from the upcoming budget to accelerate its growth in the sector. From lowering GST rates on raw materials to including EV industry in the priority sector lending list, the sector has a long list of demands.

“For manufacturers, one of the key challenges on investments in the sector is the concerns regarding GST inverted duty structure. In order to minimise working capital blockage, the government should look at extending end use based benefits to the EV industry like lowering GST rates on raw materials, allowing inverted duty refunds for research and development and capital expenditure,” said Tarun Mehta, co-founder & CEO, Ather Energy.

EV makers believe incentives and infrastructure are the two major factors that will drive EV consumption in India. “As large amount of the budget allotted for this scheme remains unutilized and with the FAME II policy now in implementation mode, we request extension of the FAME II scheme up to 2025 so that its impact and benefits reach the EV buyers effectively and enables demand acceleration,” said Sulajja Firodia Motwani, Founder and CEO of Kinetic Green.

“From industry standpoint, providing short term ‘Booster Incentives’ under Fame II for a period of 24 months, in the form of further incentives will help boost demand,” he added. Industry players also pointed out that electric vehicles should be considered under priority lending sector to boost financing support. The government could consider announcing allocations that speed up domestic manufacturing capabilities by incentivising R&D initiatives, provisions that promote the cause of increasing elements of localization for the electric-vehicle segment, said Pankaj Tiwari, chief marketing officer, Nexzu Mobility.

Source from: https://www.newindianexpress.com/business/2021/jan/26/electric-vehiclemakers-seek-gst-rate-cut-to-push-growth-2255195.html