GST on lithium-ion to be brought down to 5%


The electric vehicle industry in India may soon find an accelerated growth, thanks to the prices of lithium-ion batteries coming down, albeit in the taxation form.

According to a financial daily in a recent meeting between NITI Aayog and ministries the topic of cutting down the tax on lithium-ion from 18 percent to 5 percent was discussed. This will be in sync with the taxes on electric vehicles.

While there has been a long-standing demand for rationalisation of taxes for the electric vehicle segment, right from the component to the vehicle itself.

It now seems the government is paying heed to the demand from the industry, thanks to the push toward battery swapping policy, which aims to make the EV industry competitive by allowing to introduce new business models such as Batter-as-a-Service (BaaS) or pay-as-you-go model.

It is learnt that in a meeting on Tuesday, the NITI Aayog, the Ministries of New and Renewable Energy, Heavy Industries, and other relevant government departments had a discussion around the battery-swapping policy. The meeting saw discussion around various factors including battery standardisation and tax rationalisation among others.

But on the other hand, NITI Aayog the premiere policy think-tank cannot take a decision on that matter, and it can only pass on its observations and suggestions to the GST Council, under the Finance Ministry to take up the matter.


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