The Society of Manufacturers of Electric Vehicles (SMEV) has shared its wish list for the 2023 joint budget, which includes a unified GST on EV components and an extension of subsidies for EVs under the FAME II scheme. SMEV also wants light commercial electric vehicles, including electric tricycles, to be included in the FAME II program. The SMEV wish list was released just weeks before the Union Budget for the 2023-24 financial year was announced in the first week of February.
In line with Union Budget expectations, SMEV wants all EV components to also be covered under the 5% GST to bring uniformity in taxation for EV makers. SMEV said that while a 5% GST was levied on the pre-showroom price of EVs, the industry ended up paying 28% for spare parts (excluding batteries) for EVs. “Therefore, a uniform GST of 5% is required on all EV spare parts,” it said.
SMEV also said it wanted to reduce basic tariffs on lithium-ion batteries, a key EV battery component, to zero. “Domestic lithium-ion battery manufacturing is still in its infancy,” SMEV said. It hopes to keep tariffs at a minimum until India develops enough infrastructure to manufacture lithium-ion batteries locally.
SMEV also wants the FAME II subsidy to be extended beyond March 21, 2024. statement released on Tuesday. According to the EV manufacturers group, market trends indicate that the EV segment in India, especially the two-wheeler segment, is likely to continue to grow at an exponential rate. “The subsidy can be gradually reduced thereafter,” it said.
SMEV also wants the scope of the FAME II program to be extended to light commercial vehicles, medium and heavy commercial vehicles in India to transition to electric public transport such as trucks and buses in the next three to four years. SMEV stated, “Based on the project model, the scope of FAME has been extended to include commercial vehicles. Today, trucks account for over 40% of fuel consumption in India and over 40% of GHG emissions from the entire road transport sector.”
In 2022, India’s electric vehicle market will grow by more than 200%, with sales of nearly 1 million units, marking a record year. Indians bought 999,000 electric vehicles last year, led by electric two-wheelers in the passenger EV segment.
First published date: Jan 3, 2023 at 13:31pm CST
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