The Finance Minister has announced a reduction in GST for Electric Vehicles from 12 to just 5 per cent. Buyers purchasing EVs on loan can also save Rs 1.5 lakh on the interest.
The Union Budget 2019 brings good news for all electric vehicle manufacturers. Currently, electric vehicle accounts for only 1 per cent of overall sales in the country. In a bid to push cleaner vehicles, the Finance Minister announced a reduction in the GST (Goods and Services tax) from 12 to 5 per cent. Additionally, the FM also announced an additional income tax deduction of Rs 1.5 lakh if an electric vehicle is purchased on the loan. Earlier this year in April, the government had already approved a budget of Rs 10,000 crore under the FAME II scheme to push sale and use of electric vehicles by giving the right incentives and benefits.
Speaking about the Union Budget 2019, Tarun Mehta, CEO and founder of Ather Energy said, “It addresses the concern of the upfront cost of purchasing electric vehicles. This is the best example of a consumer-driven change and is also how Ather Energy envisions the EV sector to achieve scale and growth. It now becomes imperative that OEMs chalk out plans that allow the industry to scale up and meet the demand for compelling products.”
Praveen Kharb, CEO and co-founder of 22 KYMCO said, “The Budget announced by the FM for 2019-20 will catalyse India’s journey to electrification and will be beneficial for both, the e-mobility industry as well as the consumers looking to make the shift.”
Aside from the direct benefits, the government also aims at making India the hub for the production of electric vehicles. There are also plans to aid in setting up battery mega factories and building public-private partnerships to improve charging infrastructure. In the meantime, the government will also offer custom duty exemptions for certain EV parts until the time local manufacturing is up and running.
These benefits come at a good time for manufacturers keeping in mind several EVs are in scheduled to be launched in India in the near future. Hyundai is all set to bring in the Kona later this week, MG Motor will bring the eZS around October and Audi will bring in the e-tron towards the end of 2019. Next year, we are also likely to see the launch of the Wagon-R EV, Altroz EV and a few others.