Motown alarmed over higher GST on EVs

Mumbai: Electric carmakers are strongly objecting to a proposed increase in the Goods and Services Tax (GST) on premium electric vehicles, warning that it could stall momentum in the country's shift to clean mobility just as adoption is accelerating.The Group of Ministers (GoM) on GST rationalisation has reportedly proposed that EVs priced above ₹20 lakh be taxed at 18%, up from the current 5% concessional rate. While the GST Council, the apex decision-making body on the indirect tax, has yet to take a final decision, even speculation about the move has rattled carmakers, who say it is affecting consumer sentiment.Shailesh Chandra, MD, Tata Motors Passenger Vehicle and Tata Passenger Electric Mobility, pointed to the rapid strides EVs have made in the past year-real-world ranges of up to 500 km, more than 24,000 public chargers nationwide, and on-road price parity with ICE vehicles in several SUV segments. The concessional rate has been instrumental in overcoming consumer hesitancy, he said."It is therefore imperative that the 5% GST rate for EVs be retained," said Chandra. "Any upward revision would adversely impact EV adoption in India and slow down the transition to clean mobility, diluting environmental gains, and impacting India's aspirations towards zero-emission mobility."123621654A total of 15,528 electric cars were retailed in India in July, a 93% surge from a year earlier, according to the Federation of Automobile Dealers Associations (FADA). During the month, EVs had a 4.7% share of the broader passenger vehicle market, nearly doubling from 2.4% in July 2024.Automakers fear if the GoM's proposal is accepted, prices of around a fourth of EVs above ₹20 lakh could rise sharply, potentially slowing the adoption trajectory.A spokesperson for Mahindra & Mahindra said the 5% rate is critical to maintain parity with ICE vehicles and to scale the ₹10-40 lakh EV segment, a key component of India's global competitiveness.The industry also flagged the importance of policy consistency to support long-term investment."To sustain EV adoption, we need stable long-term policies, accelerated CAFE norms, and zero percent GST on fully electric vehicles," said Anurag Mehrotra, MD, JSW MG Motor India. "Investments in charging infrastructure and easing home charging will also be critical."Luxury carmakers warned that the entry-level luxury EV segment could be most affected, though high-end buyers are less price-sensitive.Prevailing low GST rates have supported threshold volumes and accelerated BEV adoption, said Santosh Iyer, MD and CEO, Mercedes-Benz India.

from Economic Times https://ift.tt/nyl8QSx
via IFTTT