The fast-growing electric vehicle (EV) industry is seeking good and services tax (GST) rate cut on components and an extension of the Faster Adoption and Manufacturing Electric (FAME) subsidy scheme from the government in the 2024 Union Budget.
The demand from the industry comes amidst speculations that the Centre may extend the second phase of FAME scheme until the third phase (FAME III) is approved, “We at Hero Electric are hopeful to see a continued focus on long term policy measures that promote EV adoption such as reduced GST rates, extension of FAME-II subsidies / introduction of FAME-III, and increased infrastructure spending for charging infrastructure. This will spark consumer confidence and will bridge the affordability gap,” one of the expert said.
Another expert said budget anticipation surrounds on updates related to potential FAME 3 scheme, production linked incentive scheme sops and revisions to GST for two-whillers. He added that a uniform 5% GST on all EV spare parts, aligned with the 5% GST on vehicles, resonat within the industry, as they aim for a more equitable tax structure.