Union Budget 2019 saw a drop in GST on Electric Vehicles along with a reduction in GST on import of electric components
Honorable Finance Minister, Nirmala Sitharaman has delivered Union Budget for the year 2019. In the budget, the focus was on urban and rural development including roads and other infrastructure. There is also emphasis given towards the boost of green mobility by reducing the GST on EVs to 5%.
Moreover, the import duty on Lithium-ion battery cells has been reduced to nil. Income-tax deduction of 1.5 lakh is proposed on the interest of loan used to purchase electric vehicles in India. These things will help in further boosting electric vehicles sales in the country. Here are reactions of the heads of electric two-wheeler makers on Budget 2019.
Tarun Mehta, CEO of Ather Energy
“Government has already moved GST Council to lower GST on EVs from 12 percent to 5 percent and the additional income tax reduction is a major boost for end consumers to purchase EVs. It addresses the concern of the upfront cost of purchasing electric vehicles.”
He further adds, “This is the best example of a consumer-driven change and is also how Ather envisions the EV sector to achieve scale and growth. It now becomes imperative that OEMs chalk out plans that allow the industry to scale up and meet the demand for compelling products.”
Naveen Munjal, Managing Director of Hero Electric
“The electric vehicle industry needed a substantial boost & support from the government and we welcome the government’s recommendation of reduction of GST on EVs from 12% to 5%. In addition to this, income tax reduction of up to Rs 1.5 lakh on the interest paid on EV loans is an extremely positive move which will encourage customers to make a switch from ICE vehicles to EVs.”
He continued, “Reduction in customs duty on lithium-ion cells would help local component manufacturers in scaling up the production. This will further reduce the overall upfront cost of electric vehicles in the country. Government’s continued emphasis on FAME II initiative and strengthening of EV infrastructure will definitely encourage manufacturers to further invest in the ecosystem. This would lower both crude oil imports and air pollution leading to a cleaner and greener future.”
“We are confident that such directives will boost up the rate of EV adoption in the country. And will act as a catalyst in the government’s aim of faster adoption of electric vehicles and a higher level of localization under the ‘Make In India’ initiative.” He added.
Amit Raj Singh, Co-Founder of Gemopai Electric
“There is heightened interest in the EV industry, not just in India but globally too, as we all set out for a better future. Electric Vehicles is the disruption the auto industry badly needs. And the Union Budget 2019 surely has announced catalysts for the growth of the Electric Vehicles industry. The Government’s statement of purpose for making India become a global hub of manufacturing EVs is welcome and much needed.”
He further stated. “As a key player, we await a more detailed EV plan to become a partner of growth for the Government. The much-needed reduction in the customs duty for components in EVs to 5% will help in shipping more greener technologies and vehicles to the country.”
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“We also laud the reduction in GST on Electric Vehicles from 12% to 5%. The lowering or GST will make the transportation of the future more affordable for consumers. Currently, two-wheelers form only 16.4% of 7.6 lakh EVs sold in FY19. The reduction in GST along with an additional IT deduction of Rs 1.5 lakh on interest paid on loans for EVs, will help break the entry and perception barriers for the price sensitive Indian customers”
There is a wave of relaxation among electric vehicle manufacturers in India. However, a detailed roadmap is urgently needed to work on the future of mobility.
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