Team-BHP > Electric Cars


Reply
 
Thread Tools Search this Thread
Old 27th July 2019, 13:03   #1
BHPian
 
jailbird_fynix's Avatar
 
Join Date: Sep 2018
Location: (,)_\,,/
Posts: 465
Thanked: 3,028 Times
Default GST on EVs slashed from 12% to 5%

GST on EVs slashed from 12% to 5%-img_20190727_130859.jpg

In a landmark move by the government, the GST Council has brought down the GST on electric vehicles (EVs) to 5 per cent from 12 per cent.

The Council also slashed the GST on EV Chargers from 18% to 5%. The new rates will be effective from 1st August 2019. GST Council also approved exemption from GST on hiring of Electric Buses by local authorities. The government would provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase electric vehicles. Impact of this measure on government revenue will be around Rs 60 crore this fiscal.

ET Auto

Last edited by jailbird_fynix : 27th July 2019 at 13:12.
jailbird_fynix is offline   (17) Thanks
Old 27th July 2019, 18:37   #2
BHPian
 
Thermodynamics's Avatar
 
Join Date: Aug 2017
Location: Bengaluru
Posts: 778
Thanked: 3,787 Times
Default re: GST on EVs slashed from 12% to 5%

on a similar note Niti Ayog says,

India Has Game Plan For Electric Vehicles
Quote:
Amitabh Kant said the country's EV focus should mainly be on two-wheeler and three-wheeler vehicles and public transport.

India has put in place a game plan for electric vehicles (EV) and its components like batteries to ensure clean cities, reduce imports and utilise solar power.

Domestic battery manufacturing for electric vehicles provides a "massive market opportunity", and also quickens the transition to such environment-friendly transport, which is vital for the country to help combat pollution, congestion, strengthen energy security and create jobs.

We have a game plan to drive electric vehicles, particularly two and*three-wheelers, public transport and manufacturing of batteries in India. Our objective is that we should first work on about 80 per cent of components of two and three-wheelers and buses and also push manufacturing of batteries in India.

Our objective is to clean up cities, reduce imports, and utilise the sun and its energy for driving electric vehicles.

From the perspective of energy security and competitive advantage, new mobility solutions will reduce oil import costs, lower India's trade deficit and limit our vulnerability to oil supply disruptions.

With low per capita car ownership, which currently is 20 vehicles per 1000 people, India has an opportunity to leap frog ahead of the legacy model of individually owned internal combustion Indian vehicles that are utilised by only 5 per cent of the people, he said.

India's low per capita car ownership affords the chance to pursue a different model from the western world. Our emphasis must be shared, connected electric transportation.

He said to create a unique eco-system to enable ''Make in India'', and drive the movement for manufacturing in India, the country will require a phased programme across the entire value chain, an efficient fiscal impact structure, and size and scale aligned to the country's ambition to produce world- class vehicles for domestic and international markets.

"With batteries accounting for almost 40 per cent of total cost of EVs today, domestic battery manufacturing is a massive market opportunity for India to rapidly enable the transition to EVs

New battery technologies like solid state lithium ion battery, sodium ion battery, and silicon based batteries are underdeveloped. India needs to vigorously pursue research and development and have a clear road map for manufacturing on a mega scale.

To facilitate charging infrastructure, newer models should be explored and start-ups must be facilitated in this area. New cities like Dholera (coming up near Ahmedabad) should allow maximum number of EVs.

Chief Secretary JN Singh said Gujarat is poised to lead in the field of e-mobility.*Dholera is emerging as a very important township for this. A big company will announce investment in Dholera in lithium-ion battery manufacturing for EVs....We plan to develop a 5,000-MW solar power plant, and 250 MW plant will be ready soon. We are in the last stage of discussion with Tata Chemicals for lithium-ion battery manufacturing plant. The battery is vital for e-vehicles and comprises 40 per cent of car cost.
Source
Thermodynamics is offline   (7) Thanks
Old 27th July 2019, 18:51   #3
BHPian
 
jailbird_fynix's Avatar
 
Join Date: Sep 2018
Location: (,)_\,,/
Posts: 465
Thanked: 3,028 Times
Default re: GST on EVs slashed from 12% to 5%

Regarding batteries, the next ideal step would be to reduce the 18% GST for spare batteries as it will help maintain the low running cost of EVs over their lifetime.
jailbird_fynix is offline   (5) Thanks
Old 27th July 2019, 19:40   #4
BHPian
 
Join Date: Nov 2015
Location: Chennai
Posts: 153
Thanked: 293 Times
Default re: GST on EVs slashed from 12% to 5%

Govt should have considered a still lower rate like 1% with refund of unadjusted input tax credit due to the inverted tax structure. Further the government should have considered reduction of tax for Hybrids too.
DImPo is offline   (4) Thanks
Old 27th July 2019, 19:50   #5
BHPian
 
SpideyBoy's Avatar
 
Join Date: May 2019
Location: Hyderabad
Posts: 208
Thanked: 837 Times
Default re: GST on EVs slashed from 12% to 5%

Quote:
Originally Posted by DImPo View Post
Govt should have considered a still lower rate like 1% with refund of unadjusted input tax credit due to the inverted tax structure. Further the government should have considered reduction of tax for Hybrids too.
That's a big no no. Instead some genius comes up with a brain storming idea to make more money from hiking the registration renewal fee by 20 times .

Related thread on that can be found here (Vehicle registration & renewal charges to be hiked by 20 times (2019)).
SpideyBoy is offline   (3) Thanks
Old 27th July 2019, 20:24   #6
Senior - BHPian
 
bigron's Avatar
 
Join Date: Sep 2007
Location: NSEW
Posts: 1,283
Thanked: 2,502 Times
Default re: GST on EVs slashed from 12% to 5%

If they really want the masses to adopt the whole EV bandwagon they need to come up with incentives. Reducing GST is hardly pathbreaking. If they want the larger public to adopt this, they need to think out of the box. We Indians love freebees. Throw in tax rebates or maybe free toll plaza use vouchers, insurance discounts etc etc. Let the people first understand and acknowledge that such a technology exists and that it is beneficial in the long run.
Once the marketing is out there, only then will people actually take this seriously. At the moment for an average car buyer this is a niche market that only the rich play at.

Last edited by bigron : 27th July 2019 at 20:27.
bigron is offline   (5) Thanks
Old 28th July 2019, 09:51   #7
Senior - BHPian
 
Join Date: Dec 2007
Location: Dubai
Posts: 3,959
Thanked: 297 Times
Default re: GST on EVs slashed from 12% to 5%

Quote:
Originally Posted by bigron View Post
... If they want the larger public to adopt this, they need to think out of the box. We Indians love freebees. Throw in tax rebates or maybe free toll plaza use vouchers, insurance discounts etc etc. Let the people first understand and acknowledge that such a technology exists and that it is beneficial in the long run.
Once the marketing is out there, only then will people actually take this seriously. At the moment for an average car buyer this is a niche market that only the rich play at.

This is a really good idea for mass adoption of the technology. This is similar to what is being done by the authorities at Dubai, where similar benefits have been announced for electric cars.



But, as with anything that you do in India, it is easy to announce a scheme, but very hard to enforce it and more important, ensure it is not being abused by specific elements in the society, for their gain.
HappyWheels is offline   (2) Thanks
Old 28th July 2019, 10:10   #8
Senior - BHPian
 
Sebring's Avatar
 
Join Date: Apr 2011
Location: Dubai/Bengaluru
Posts: 2,286
Thanked: 6,432 Times
Default re: GST on EVs slashed from 12% to 5%

Hyundai Kona is over a lakh cheaper and will be available for 25 Lakhs on road, in Bangalore. The Sales guys were urging customers to wait for this announcement at launch time.
Sebring is offline   (4) Thanks
Old 28th July 2019, 17:22   #9
BHPian
 
Join Date: May 2017
Location: Chennai
Posts: 126
Thanked: 233 Times
Default re: GST on EVs slashed from 12% to 5%

Quote:
Originally Posted by bigron View Post
If they really want the masses to adopt the whole EV bandwagon they need to come up with incentives. Reducing GST is hardly pathbreaking. If they want the larger public to adopt this, they need to think out of the box. We Indians love freebees. Throw in tax rebates or maybe free toll plaza use vouchers, insurance discounts etc etc. Let the people first understand and acknowledge that such a technology exists and that it is beneficial in the long run.
Once the marketing is out there, only then will people actually take this seriously. At the moment for an average car buyer this is a niche market that only the rich play at.
You have 1.5 lakhs income tax deduction on interest paid on an EV car loan. On the other hand, ours is a country where everyone wants something free. Even if govt do give some incentive, people would simply want more.
gopalnt is offline   (4) Thanks
Old 28th July 2019, 17:46   #10
Senior - BHPian
 
bigron's Avatar
 
Join Date: Sep 2007
Location: NSEW
Posts: 1,283
Thanked: 2,502 Times
Default re: GST on EVs slashed from 12% to 5%

@ gopalnt - So, what is wrong with that?
If the government wants a new technology that is easy on our limited resources and is
in line with the governments long term policy to save the environment, they need to make the technology accessible and give incentives for an average car user to even think about adopting the same.
To give an example, its like giving subsidiary to farmers to adopt poly farming.

So for a person in the market for a 10/15 lakh car to even look at a 25 lakh Kona, needs to be convinced that all said and done in the long run he is not only going to save money but will also get other benefits like the ones I mentioned in my previous post. In-fact, I would say reduce the import duty drastically on such vehicles for a limited time so that they have a chance to be viewed even as an alternative when someone is out shopping for a car.

The government has to make owning the vehicle easier for first time adopters and make it easier for the manufacturers to build/bring in these kind of vehicles. Once the economies of scales is achieved and a certain volume of market is established, more players with vehicles at various price points will start coming in.

Last edited by bigron : 28th July 2019 at 17:52.
bigron is offline   (6) Thanks
Old 29th July 2019, 14:43   #11
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 61,644
Thanked: 210,015 Times
Default Re: GST on EVs slashed from 12% to 5%

Sweet news, but not ground-shaking as it benefits almost no one. These are only temporary measures and by the time that mass-market EVs arrive, the government will start increasing the GST rate again.

Anyway, at the end of the day, EVs have to make sense at regular prices (without subsidies) to benefit everyone. That's still a long time away.

What I would have REALLY wished for is the government slashing the GST on "real hybrids" (not lame mild-hybrids) to 5%. That would overnight lead to a hybrid phenomena, not too different from the one we saw with AMTs. A proper hybrid system could make your Hyundai i20 give 30 kmpl and Honda City 25 kmpl. How's that for game-changing?

P.S. We have a scoop coming out shortly about Maruti-Bosch testing a proper hybrid .
GTO is offline   (10) Thanks
Old 29th July 2019, 14:51   #12
BHPian
 
Join Date: Jan 2019
Location: Bangalore
Posts: 196
Thanked: 512 Times
Default Re: GST on EVs slashed from 12% to 5%

Quote:
Originally Posted by GTO View Post
What I would have REALLY wished for is the government slashing the GST on "real hybrids" (not lame mild-hybrids) to 5%.
Tax cuts should be given to any vehicle which is proven to "significantly" reduce emissions compared to ICE vehicles. Hybrids, fuel cell cars, and EVs should be taxed in the lowest slab, or be tax free. The government should also actively subsidize charging infrastructure. That will be money well spent, and could replace the money spent on curing the ill effects of burning fossil fuels.
KL01toKA03 is offline   (4) Thanks
Old 29th July 2019, 21:00   #13
Distinguished - BHPian
 
anjan_c2007's Avatar
 
Join Date: Jul 2008
Location: India
Posts: 6,579
Thanked: 10,027 Times
Default Re: GST on EVs slashed from 12% to 5%

Today's editorial in Economic Times discusses the reduction in GST for EV's and offers suggestions to build a distributed charging infrastructure for electric-powered mobility. It says that issues like pollution, congestion and mobility issues will not be addressed by incentivising EV's.

The editorial further says that India should aim at becoming an international hub for sourcing EV's whereas the budget aims at domestic demand.

I would like to state here that we presently only rely nearly 100 % on the Chinese for imports of the wierd and wacky looking two wheelers. And in the four wheeler category we have the E20, a supercompact and dated, odd looking EV from Mahindra costing Rs 11 lakh on road, now to cost Rs 60,000 less due to the GST rate cut. There is doubt as to whether buyers will be attracted to the E2O with all such incentives like the low GST and the Income Tax rebate for a part of the loan. And the Verito, another dated in design EV is available from Mahindra. Only God can say how much these are selling and how will the concessions impact its sales post budget and post the GST rate cut. The Hyundai Kona the newest to be launched, costs a bomb for a mini SUV of its size and the company has targeted a hundred or so as its sales target, I believe annually.

The editorial partly quoted :-

Quote:
India must increase its electric two-wheeler and four-wheeler manufacturing capacities, particularly with an eye to cornering global demand. However, measures such as the 2019 budget’s income-tax break for interest payments on electric vehicles and the recent reduction in GST, are focused on domestic demand.
The editorial also discusses about the requisite infrastructure for EV's not being in place to cater to the potential demand :-

Quote:
The infrastructure required to underpin a big uptake in electric vehicles is not in place, nor do we see a roll-out plan. Without a road map putting in place infrastructure, especially charging facilities and options that would enable the use of electric vehicles, the tax stimulus will have no real impact.
Lastly, the editorial stresses on improving public transport as a vast majority in the population do not own a personal vehicle for mobility.

However, I would add that the Metro rail transit system is coming up in a big way in many cities and metros. But the rural parts are uncared for and there is no roadmap for an improved and pollution free public transport in place here :-

Quote:
There is another factor that the government needs to consider — the mobility needs profile of the Indian population. According to the 2011 Census, the percentage of households that own a bicycle (44.8%) and that do not own either a bicycle, two-wheeler, or four-wheeler (44.1%) is more or else equal. This figure makes clear that a sizeable proportion of the population requires improved mass public transport options. Improving mass public transport and integrating the different modes should be priority.

Improving public transport with a clear road map to transitioning to the electric platform should be the priority of the government.
https://economictimes.indiatimes.com...tric-vehicles/

Last edited by anjan_c2007 : 29th July 2019 at 21:05.
anjan_c2007 is offline   (2) Thanks
Old 30th July 2019, 00:20   #14
BHPian
 
Mr.501's Avatar
 
Join Date: Feb 2019
Location: Chandigarh
Posts: 40
Thanked: 92 Times
Default Re: GST on EVs slashed from 12% to 5%

Test drove a Hyundai Kona today, and boy was I in for a treat. I loved the drive, the acceleration,handling(yes it had steering feel). Felt refined, comfortable , extremely silent but still fun due to the boat load of power. The range and charging times really peaked my interest and I genuinely believe it is a solid product for one to buy even at this stage since I was informed that Indian oil is supposed to put up Kona ready charging stations by the end of next month when Kona's will start to get delivered. I was so impressed with the experience that the Kona has become a strong next car contender.
Putting this info here just because the move has slashed the price by a substantial margin and since Chandigarh doesn't have any registration charge on EV's it makes it even sweeter. The Indian oil collaboration should help with the infrastructure transition as well.

Last edited by Mr.501 : 30th July 2019 at 00:22.
Mr.501 is offline   (3) Thanks
Old 30th July 2019, 16:11   #15
Distinguished - BHPian
 
volkman10's Avatar
 
Join Date: Dec 2010
Location: --
Posts: 17,910
Thanked: 43,507 Times
Default Re: GST on EVs slashed from 12% to 5%

Here are the prices after the GST cuts, is it lucrative enough?

- The e Verito which was earlier priced between Rs 11.1-11.8 lakh, now starts from Rs 10.71 lakh (on-road inclusive of FAME benefits)

-The Mahindra Treo three-wheeler has been given a price cut of Rs 20,000 allowing it to have a starting price of Rs 2.05 lakh (on-road)

- Hyundai Kona is expected to be at INR 22 lakhs

- Audi e-Tron, or the Porsche Taycan when introduced in India will not benefit from the same. ( as it is a CBU)


Link
volkman10 is offline   (1) Thanks
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright 2000 - 2021, Team-BHP.com
Proudly powered by E2E Networks