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Parliamentary panel for more subsidy, GST cut to up EV adoption
Dec 08, 2021
A Parliamentary committee has recommended to the government to increase the subsidy on buying of private electric 3- and 4- wheelers as has been done for promoting the adoption of electric two wheelers under FAME-II. It has also sought an increase in import duty on “child parts” smaller parts that are assembled together to create vital parts in a phased manner till these components are manufactured locally, while taking note that some of these items are still imported from countries including China. The panel has also suggested the lowering of GST rates on hybrid electric vehicles (HEVs). It took note of how currently EV cars are taxed at 5% and big HEVs are charged 43% (28% GST plus 15% cess). “EVs reduce energy consumption by 75% over internal combustion engine (ICE), while HEVs reduce energy consumption by 30-45% over ICE without any external charger. Hence, HEVs are also entitled for discount on GST rate as in the case of EVs. GST support of HEV would help the whole ecosystem and provide impetus to EVs,” said the Parliamentary standing committee on industry. In its report, the committee has said that despite great progress in localising major components, vehicle manufacturers are still importing some child parts from other countries such as China.