PMO advisor Tarun Kapoor noted that there is also a need to look at the taxation on batteries and charging services as they attract higher GST.
19 Nov 2024 | 6893 Views | By Kiran Murali
At a time when India’s passenger vehicle industry is struggling to drive the adoption of electric vehicles, Tarun Kapoor, advisor to the Prime Minister's Office, urged the automobile industry to come up with more compelling products to expedite the transition in four-wheelers.
"In four-wheelers, what I think is that ...
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At a time when India’s passenger vehicle industry is struggling to drive the adoption of electric vehicles, Tarun Kapoor, advisor to the Prime Minister's Office, urged the automobile industry to come up with more compelling products to expedite the transition in four-wheelers.
"In four-wheelers, what I think is that the industry itself has a much larger role to play than the government. Because we need more products, better products, and more publicity," Kapoor said while speaking at an event organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) on Tuesday.
Electric vehicle adoption in the passenger vehicle segment has been slow, with the EV penetration level in low single digits. In contrast, two-wheelers accounted for 56% of the total electric vehicles sold last year, while three-wheelers constituted 38%.
Affordability and limited charging infrastructure have been major hurdles in the faster adoption of electric vehicles. Whereas, demand incentives given under the FAME scheme, and the subsequent PM E-Drive has been instrumental in driving electric vehicle sales.
While cars used in fleets such as taxis were part of the FAME scheme, the new PM E-Drive has excluded them. However, Kapoor noted the government is keen on driving the electric vehicle adoption in four-wheelers with a higher focus on boosting the charging infrastructure in the country.
“From the government side, there is a huge outlay of charging infrastructure in the PM E-Drive,” he said. The PM E-Drive scheme greatly emphasises developing India’s charging infrastructure.
The scheme has more than doubled the outlay for charging infrastructure to Rs 2,000 crore, which includes the installation of 22,100 fast chargers for four-wheelers.
"But on products and getting more customer satisfaction with more choices, the industry has to plan a much bigger role," he added.
Need to look at taxation on batteries, charging services
The PMO advisor also noted that there is a need to look at the taxation on batteries and charging stations for electric vehicles.
“We need to probably look at the taxation on batteries. If someone provides charging as a service, then GST becomes higher,” Kapoor said.
While the GST on electric vehicles has been reduced to 5%, the GST on batteries and charging services for electric vehicles remains 18%. The industry has been pushing the government to reduce the GST on these to 5% to make the electric vehicle industry more competitive.
“We understand that taxation is a major issue. We have to look at all aspects, all levels so that the industry remains viable and then in the long run, it remains competitive also,” he said.
“This has already been flagged to the concerned authority. GST decisions goes through the GST council. The government doesn't take any direct decision on it.”
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