The Society of Manufacturers of Electric Vehicles (SMEV) has called for a uniform 5% GST on EV spare parts and enhanced support for battery manufacturing and recycling.
“While 5% GST is levied for the vehicle, for spare parts, there is no clarity and the industry ends up paying 28% (except for batteries),” it said, urging for a uniform 5% GST for all EV spare parts.
The EV manufacturers have also urged the government to review customs duty on lithium-ion cells for EVs as cell manufacturing within the country is still in its nascency. They have called for the scrapping of customs duty on cells until cell manufacturing starts in India.
The manufacturers also want an extension of the FAME Scheme, citing they are yet to meet the penetration the subsidy was supposed to catalyze. The validity of FAME II is set to expire on March 31, 2024.
“The new FAME II scheme should be linked to E-mobility conversion rather than being time-based. According to market trends, E Mobility, particularly E2W, has the potential to continue growing once it reaches 20% of the total 2W market. The subsidy can be tapered thereafter,” they said.
Further, the FAME II scheme should have provisions to directly transfer the subsidy to the customers. The scope of FAME should be expanded to include commercial vehicles on a project-mode basis. “Today, trucks account for over 40% of India’s fuel consumption and over 40% of the Greenhouse gas emissions across the road transport sector. Expanding the FAME subsidy to electric tractors will help India reduce fuel imports and GHG emissions,” they said.
The EV manufacturers have also called for incentives/grants for battery R&D and a policy towards lithium-ion battery recycling. “For research & development expenses related to battery recycling, a 200% tax rebate, as before, may be considered.”
Other recommendations include the implementation of a Battery Swapping Policy, reduction in GST on swap batteries, and FAME II subsidy for extra (float) batteries for battery swapping.
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