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Industry body FICCI on Tuesday said it will make a recommendation to the Goods and Service Tax (GST) Council to bring down the tax rate on electric vehicles’ charging infrastructure and batteries to 5 per cent from the current 18per cent.
“While EVs attract a GST of 5per cent, GST on batteries is 18per cent. The request is to reduce it to 5per cent so that when consumers buy replacement batteries, it is more affordable,” said Sulajja Firodia Motwani, founder and CEO of Kinetic Green and chair of FICCI Electric Vehicle Committee.
Talking to reporters on the sidelines of a conference organised by FICCI, Motwani said, “We would be making a recommendation to the GST Council to rationalise the GST taxation on EV-related areas.”
GST is levied at a rate of 5per cent on EVs against 28per cent on internal combustion engine (ICE) vehicles. Import of ICE vehicles attracts 28-50 per cent tax while EVs are taxed at flat 5 per cent. In a report released at the event, FICCI called for imposition of a flat 5per cent GST across EV value chain.
Addressing the conference, Minister for Heavy Industries and Steel HD Kumaraswamy said the Centre is backing research to bring down costs and improve efficiency of EVs
“We are actively supporting research initiatives in battery technology, charging infrastructure and recycling. The PM E-Drive is focused on creating an expansive EV ecosystem that supports both manufacturers and consumers through incentives and infrastructure development,” Kumaraswamy said.
The Union Cabinet, in September, had approved the PM E-Drive scheme for promotion of electric mobility in the country, at an outlay of Rs 10,900 crore over a period of two years.
Kumaraswamy said the Ministry of Heavy Industries is leading the nationwide push for electric vehicle adoption, contributing to India’s ambitious net-zero target for 2070. “We are seeing valuable exchanges in areas like battery recycling, grid integration and software-driven efficiency, all of which are strengthening India’s position in the global EV landscape,” he said.
Speaking at the event, Tarun Kapoor, an Adviser to Prime Minister Narendra Modi, pitched for lower GST on EV charging services and batteries. Kapoor said the government is working to increase EV penetration to 30 per cent by 2030.
“On two-wheelers, we should have much higher targets and a complete replacement is what we have to look for in this segment. For three-wheelers as well, the switch has to be 100 per cent, at least in some cities,” he said.
“For four-wheelers, the government is fully supportive and there is a need to look at GST on batteries and charging stations,” Kapoor added.