The Finance Ministry has reduced GST on Lithium-ion batteries used in electric vehicles to 18% from 28%.
Mr. Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), has hailed the move by stating: “We thank the Finance Ministry for taking corrective measures to some extent, which is the anomaly of extra 16% GST on Lithium-ion batteries when sold separately. This was a major deterrent in battery swapping and battery leasing. Moreover, batteries, when sold in spares, were also becoming costlier by 16%. The customer needs to purchase batteries once every 4 to 7 years, and this higher GST was, therefore, adversely affecting the total cost of ownership of EVs. Ideally, GST on Li-ion batteries should have been kept the same as 12% for EVs. We hope that, in the next round of deliberations, the GST Council would correct the taxes in line with what is currently being charged on electric vehicles.”