The goods and services tax (GST) imposed on electric vehicles in the country may be cut down to 5 % from 12%, according to a report coming in from The Economic Times. The matter is supposed to be discussed by the Indian government in the upcoming 35th GST council on June 20. The primary reason for the cutback in GST is to provide a stimulus to the EV sector in the country.
“There is a proposal to cut tax rates on EVs among other issues,” stated a government official as per ET. India plans onto bring down the pollution levels and one way would be to incline towards electric vehicles.
Electric vehicles have been the prime focus of the current and previous Modi government. Lower duties will possibly encourage manufacturers worldwide to make an investment in the sector in India. Punjab has written to the Centre requesting a review of tax rates.
Taking up a really bold move, government think-tank NITI Aayog moved a Cabinet note regarding the sale of only electric vehicles in India by 2030. If achieved, this would be a big time advancement as per India’s Go Green targets. The think-tank also added, asking the road transport and highway ministry to prepare a framework, helping cut down on sale of petrol and diesel vehicles. The proposal reportedly includes a plan to manufacture 50 gigawatt hour (Gwh) batteries by 2030.
Indian Government has been consistently pushing for EV adoption, through various guidelines. A more recent report states that cab operators like Ola and Uber, could soon be asked to mandatorily deploy 40% of their total fleet as electric vehicles by 2023. The goals is ambitious and could incur massive costs for the companies.
The automobile sector recorded major shrink in sales for fiscal year 2018-2019. It has been purported to be the larges of its kind in 18 years. The reason behind the drop is that none of the EVs sold in the country currently are able to meet the new criteria outlined by the Department of Heavy Industries (DHI) under the recently announced second phase of the FAME scheme .
The electric vehicle industry in India is still in it’s infancy though. None the less in FY2019, total EV sales in India crossed the 7,50,000-units mark and reached a staggering 7,59,600 units.