FAME III about to arrive ?

 

 

Context :

GST Council may bring rate on li-ion cells on par with EVs   /  MINT /  09 June 2022

Extract :

India may cut the goods and services tax on lithium-ion batteries and bring them on a par with taxes on electric vehicles to give a fillip to its green mobility plans.

Currently, EVs are taxed at 5%, while lithium-ion batteries are taxed at 18%.

Any decision on changing GST would have to be taken by the GST Council.

The council last cut GST rate on lithium-ion batteries from 28% to 18% in 2018.

Now, with greater emphasis on the EV ecosystem and more automakers entering the fray, there is a renewed chorus for a price parity between batteries and EVs, as the latter is taxed much lower at 5%.

“As per the current GST regime, tax rates on lithium-ion batteries and electric vehicle supply equipment (EVSE) are 18% and 5%, respectively. The GST Council, the decision-making body on GST provisions, may consider reducing the differential across the two tax rates. The council will take an appropriate decision in this regard at a suitable time," the draft policy said. 

The government think tank also suggested an existing scheme be revised or a new scheme be launched to provide subsidies to developers of battery-swapping stations.

The government is expected to develop the final policy in around three months.

 

MY  TAKE  :

 

Ø  Anomaly by Oversight ?................................ [ 02 Nov 2017 ]

Extract :

Ø  I am talking of GST rate of 28 % on imported Lithium-ion batteries required for electric vehicles , whereas GST rate on finished EV is fixed @ 12 % !

 

Ø  If GST on these imported batteries was reduced to 12 % , the cost of manufacture of EV , would come down by Rs 0.70 lakh 

 

Ø  I do hope the next meeting of GST Council expected to be held on 10^th Oct , would reduce the GST rate on Li-ion Batteries to 12 %

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Ø  FAME II > FAME III > FAME IV …………………… [  05  March  2019  ]

 

Extract :

What , if any , is the shortcoming of just announced FAME  II  ?

 

 #     It focuses solely on “ Incentivizing the Buyers “ through subsidies

  

#    There are no “ Incentives “ for the vehicle manufacturers to ramp up

      production or commercialize “ cost  reducing “ technologies, especially in the

      matter of Lithium-ion batteries which constitute up to 40 % of EV

      ex-factory price

       

#    There are no “ dis-incentives “ for manufacture / sale / purchase of Petrol –

      Diesel vehicles

 

 #    Linking the subsidy amounts with battery size is not the right method .

     

      In fact a vehicle with a smaller size battery , but giving same performance (

      speed – range – charging time etc ) as a vehicle with a bigger battery,  should

      be rewarded with higher subsidy !

 

      =====================================    

 

      Congratulations , Shri GopuKumarji ………………..[ 30 Jan 2019 ]

 

Extract :

 

Ø  No GST on Sodium-ion cells produced by these licensees , nor payment of any Corporate Income Tax for 10 years for these Licensees

 

    

Ø  If for any reason , it is not possible to exempt the entire income from Corporate Income tax , then , at least the income derived from exports of sodium-ion cells , should be exempted

   =================================================

 

Dear  GST  Council Members :

 

I hope you to consider my following suggestions :

#   For imported Lithium Ion Batteries, reduce GST to 5 %

#   For locally manufactured Li-ion Batteries, reduce GST to 3 %

#   For locally manufactured batteries having Advanced Chemistry, reduce GST to

     ZERO %

     ( Some examples of Advanced Chemistry Batteries :

Ø   “ Zinc-Air “ Battery under development by IIT-Madras

Ø  “  Sodium – Ion “ Battery developed by CECRI

Ø  “ Alu – Air “ Battery for which IOC has formed JV with PHINERGY ( Israel ) / www.al-air.com

Ø  “ Green Hydrogen “ process developed by CECRI

Ø  “ Iron – Air “ Battery  

 

With regards,

Hemen Parekh  /  hcp@RecruitGuru.com  /  09 June 2022