Budget 2024 expectations: EV industry pins hopes on subsidy extension and GST reforms

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FAME scheme in promoting widespread EV adoption. Sreyas acknowledged the government's dedication to the cause but pointed out a notable disparity in GST rates between EVs sold with fixed batteries (taxed at 5%) and lithium-ion batteries used for swapping (taxed at 18% when sold separately). Anticipating the budget, Sreyas expressed hope for GST parity for EV batteries used in swapping, aligning them with the 5% bracket to fortify the EV landscape.

Avinash Sharma, Co-Founder & CEO of ElectricPe, highlighted the positive impact of favorable government policies on EV sales and production. Sharma called for an equitable landscape with subsidies and incentives across states and the center, expecting this to boost production, sales, usability, and support. He particularly emphasized the need to lower the GST rate on batteries from 18% to 5%, aligning battery swapping and subscription with traditional EVs.

Sharma also advocated for a uniform 5% GST rate across states for charging, aiming to facilitate faster EV adoption and infrastructure development. Chakravarthi C., Managing Director of Quantum Energy, stressed the industry's anticipation of crucial measures in the upcoming budget to sustain and enhance its growth. With the FAME II subsidy program set to expire in March 2024, stakeholders are collectively calling for its extension to ensure ongoing efforts to enhance the affordability and accessibility of EVs.

Chakravarthi C. noted that an extension would align with the government's ambitious target of achieving 30% electric vehicles on Indian roads by 2030. Moreover, industry leaders are hopeful for a significant reduction in the GST on lithium-ion battery packs and cells from 18% to 5%.