Electric Vehicles (EVs) also known as electric drive vehicle, are the vehicles that make use of electric motors for propulsion. These EVs are less polluting. They can receive energy from a wide range of sources such as Fossil Fuels, Nuclear Power, Tidal Power, Solar Power, etc. Electric Vehicles are the potential to reduce the pollution effect as they have zero tailpipe emissions. The Government of India has decided to reduce the rates of GST on Electric Vehicles and chargers.
Council Decision on GST Rate Cuts
The GST council on its 36th meeting on 27th June 2019, reduced the rates of GST on electric vehicles from 12% to 5% & drastic cut on EVs from 18% to 5%. These rates are effective from 1st August 2019. This initiative aims to boost or accelerate the adoption of eco-friendly mobility solutions.
GST council has also exempted from
GST on the hiring of electronic buses by local authorities.
Automobile Industrialists on New GST Rates
The government assumes that loss of revenues is not going to be more than INR 60-70 Crore due to such cuts down on GST rates.
Managing Director of Mahindra & Mahindra informed they are undergoing many EVs project; hence they will review immediately and make this fast-forwarded.
The government of India is showing intentions to promote EVs in India and reduction in GST rates is one such measure said Sohinder Gill, Director General of SMEVs. There is a seven percent reduction in GST rates so it will reduce the gap between EVs and Internal Combustion Electric Vehicles.
Head of Audi, India Mr. Rahil Ansari said that cut in these GST rates will boost up the market for EVs and it will motivate the customers who are looking for entry-level EVs as well as luxury EVs.
Current market share of Electronic Vehicle is only 0.6% in India whereas, in China, its 2% and 39% in Norway, as per the Economic Survey conducted in 2019.
In the year 2018, out of the total sale of two Crore of two-wheelers, Electric Two Wheelers hold a major part of EVs sale with 54800 Two Wheelers EVs.
Hyundai is the second-largest manufacturer of Automobiles which has recently launched electric SUV Kona, by welcoming the Government scheme of GST cut down the initiative.
Concern of States
Irrespective of its support and favorable acceptance by many automobiles entrepreneurs, cut in GST rates are also a concern for few states. States like Punjab, Delhi, and West Bengal have expressed their concerns over it.
Finance Minister of Punjab, Mr. Manpreet Singh Badal considers it as a “Hurried Decision”.
There are benefits of proposal helping manufacturing state but not destination states like Punjab.
The share of taxes of Punjab will also come down to 2.5%.
Whether promoting developments of these EVs would lead to any emissions as electricity being generated from coal.
MD of Bajaj Auto, Mr. Rajiv Bajaj has been warning the Government of India not to hurry in any decision of going ahead EVs transition. According to him, this movement will benefit more to traders rather than the manufacturers.
Role of Government in Contributing Eco-Friendly Vehicles
Analyst says there will be motivation for the automobiles industry to manufacture more EVs those help in energy saving.
India has shown commitment to cut down its greenhouse gas emission of 33-35 percent by the year 2030.
The government of India commits towards the goals of clean India by promoting alternatives to fuel-based vehicles. Reduction in GST rates is also hoped to provide a boost up and motivation for setting more manufacturing base in India.
By the year 2020, the government of India has set up the target to add 175 GW of capacity through renewable energy and also to achieve the target of generation of 40% of electricity by non-fossil sources.
One of the strong motivations to switch to EVs is to reduce our dependence on fossil fuel for transportation that is imported. Oil is imported in India which is 80% of oil requirement of India leading to Current Account Deficit.
Finance Minister of India, Ms. Nirmala Sitharaman has also proposed for deduction of INR 1.5 Lakhs on interest paid on loans taken for Electric Vehicles.
The government of India has announced the second phase of the FAME (Faster Adoption & Manufacturing of Electric Vehicles) with the effective date 1st April 2019.
NITI Aayog is also thriving to be working on a proposal to ban two-wheelers with less than 150cc internal combustion engines.
FAME 2 for Boosting UP EVs
The government of India has announced the second phase of the FAME (Faster Adoption & Manufacturing of Electric Vehicles).
Its effective date from when it comes into force is 1st April 2019
An approved budget for FAME 2 is INR 10000 Crore.
The FAME 2 will be implemented for three years from the effective date.
It aims to provide an exemption from paying road tax and exempting registration charges for hybrids and Electric Vehicles.
Charging infrastructure being crucial for EVs success is also the major focus of FAME 2, to create nation-wide Charging Infrastructure.
Government Initiative to Discourage Petrol Vehicles
With the initiatives for boost up of
EVs in India by creating FAME 2 and reducing caps of GST rates, the government
also taking initiatives for discouraging the use of Petrol or Diesel Vehicles.
The road transport minister has proposed to increase the rates for Registration of new cars which are run by either petrol or diesel from INR 600 to INR 5000. And it is INR 10000 for renewing its registration. Thus, this is a tremendous increase in rates.
GST council has also given relief to GST taxpayers by extending the date from 31st July to 30th September for filing of GST CMP-02 for filing an intimation for the availing option of payment of Tax.
What is the battery backup of Electric Vehicles Batteries?
Mostly EVs had 5-8 hours of battery
backup. Mahindra e2o gives 5 hours of
battery backup. With the help of Lead Acid Batteries, about 70% of the charging
is done in 40% of the estimated charging time.
What is the efficiency of Electric Vehicles?
EVs are 80% efficient as in this
chemical energy is stored in the battery. Lithium-ion batteries are used in EVs
making it more energy-efficient as they have high energy density.
What are the benefits of the GST cut policy of the Government on Electric
Electric cars will be cheaper by INR 60000 to INR 1.5 Lakhs. And two-wheeler will see the reduction in prices by INR 8000. Along with these it also helps to promote green modes of transport leading to eco-friendly environment
What are the initiatives taken by the government for promoting “Green
No permit required for battery-operated cars
No registration fee for EVs
Tax rebates on the interest of loans taken for the purchase of EVs