22.04.2022- NITI Aayog draft proposes GST cut on EV batteries

NITI Aayog draft proposes GST cut on EV batteries

NEW DELHI:  GST Council may consider reducing the differential across the tax rates for lithium-ion batteries and electric vehicle supply equipment (EVSE), which are at 18% and 5%, respectively, according to draft battery swapping policy released by government think-tank Niti Aayog on Thursday. 

The draft paper mentions technical and operational requirements that battery swapping ecosystems would need to fulfil, to enable effective, efficient, reliable, safe, and customer-friendly implementation of battery-swapping infrastructure. The policy paper says that any individual or entity is free to set up a battery swapping station at any location, provided that the specified technical, safety and performance standards are adhered to.

The policy was first announced by finance minister Nirmala Sitharaman in this year’s Union Budget. The draft is up for consultation, and Niti Aayog has invited comments on it until June 5. The overall vision, according to the draft paper, is to catalyse the large-scale adoption of EVs by improving efficient use of resources (public funds, land, and raw materials for advanced cell batteries) for the delivery of customer centric services. 

The paper says other incentives to boost battery swapping and prioritise metropolitan cities with a population above 40 lakh for setting up a network. The Niti Aayog in its draft policy said all major cities such as state capitals, UT headquarters and cities with population above 5 lakh will be covered under the second phase, given the importance of the two-wheeler and three-wheeler vehicle segments in growing cities.

It added that to support adoption of battery as a service (BaaS) models and EVs with swappable batteries, this policy seeks to level the playing field across business models involving sale of EVs with fixed or swappable batteries. The size of the incentive could be determined based on the kWh rating.

Source: Express News Service

https://www.newindianexpress.com/business/2022/apr/22/niti-aayog-draft-proposes-gst-cut-on-ev-batteries-2445011.html

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