Taxation challenges for electric vehicles must be addressed, says Adviser to PM 

Tarun Kapoor, adviser to the Prime Minister, highlighted taxation as a critical issue in India’s electric vehicle (EV) ecosystem during the FICCI National Conference on Electric Vehicles. He emphasized the need to revisit GST rates on EV batteries and charging services to promote smoother adoption and growth in the sector.

"Government support for four-wheelers remains strong, but certain areas require attention. While GST on EVs is already lower, there’s a need to examine taxation on batteries and charging services, where GST is higher. This concern has been flagged to the relevant authorities," Kapoor stated. He explained that the GST Council is the deciding authority on tax rates, leaving the government with limited immediate solutions. This issue also extends to other storage systems, such as those in the power sector, which face similar challenges with elevated GST rates.

Kapoor underlined the importance of the EV sector for India's energy security and its ambition to become a global leader in EV manufacturing. "India has robust motor vehicle manufacturing capabilities, and EV penetration has to rise significantly. We are targeting 30% EV sales by 2030, and for two-wheelers, we should aim for complete replacement with EVs," he said.

While subsidies for three-wheelers have been restored, Kapoor lauded the sector's progress, calling the earlier depletion of subsidies a "big success."

He suggested that 100% transition for three-wheelers is achievable, especially with the potential for battery-swapping solutions.

For four-wheelers, Kapoor noted that the industry must play a larger role in driving the shift to EVs. "Taxation is a major issue that needs attention at all levels, but the industry must also step up," he added.

The government's push for EVs, combined with efforts to resolve taxation hurdles, reflects India's commitment to a greener future and its aspiration to lead in EV manufacturing globally