Auto mobile industry players are working toward extension of the incentive scheme for electric mobility under the FAME scheme and hoping for a positive response from the upcoming union budget with a long term plan for atlteast next five years. This extension will lead to achieving India's electric vehicle target which in turn will undoubtedly help in reviving of the industry.
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The government had launched the FAME India scheme in 2015 with an aim to encourage eco-friendly vehicles. It predicted Rs 795 crore support for the first two fiscals. Faster adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) falls under National Electric Mobility Mission Plan.
The industry is also expecting that GST will come in effect from April 1 as far as the taxation side is concerned. GST as we all are aware will bring good news for all the companies in the manufacturing sector owing to the expected benefit so again cheers to the electric vehicle industry!
Those companies who are locally manufacturing vehicles can expect benefit because of cost advantage due to lower taxation. GST will uplift the electric vehicle industry on the taxation front as it will soak up many of the currently levied state, central government and local body taxes.
On the whole cost of manufacturing vehicle will be reduced by easing off the cascading effect of tax-over-tax. This easy and consistent tax structure will simplify the way of doing business for those in the manufacturing industry. As far as the electric vehicle industry is concerned the suppliers, manufacturers, dealers and particularly the customers who will get the utmost benefit.
Furthermore, GST will transform India into "one market". Government will infuse a positive spirit in the economy and bring in a lot more efficiency in operations as compliance burden on the whole will reduce. From the prospective of Indirect tax the entire country will be perceived as 'One Market' which will lubricate operational competence.
GST is extremely beneficial as far as electric vehicle industry is concerned. The industry as a whole is appreciating the Government of India and political parties for carrying the GST baton and taking it forward. Implementation of GST will fuel the growth of electric vehicle industry. In the current scenario, some states are still charging heavy taxes on electrical vehicles where as some states are charging around five percent. Considering all goes well, it is expected that GST rate should reduce the total tax burden on electric Vehicles. Under this favourable climate, the GST rate is expected to be in the lowest possible slab.
Additionally, focus on infrastructure development and government initiatives for development and promoting of electric vehicle will also create promising environment for this industry.
Ayush Lohia, CEO, Lohia Auto Industries