GST cut on Batteries for Electric Vehicles on the cards: Report

Electric cars, electric scooters, electric bikes and other EVs in India could become significantly cheaper in the coming months. The Indian government may slash the GST on Lithium-ion batteries to make EVs more affordable, as per a new report from

NITI Aayog, the Think Tank behind the Indian government’s future-forward policies, is charting the course for India’s EV era. It is pretty bullish and aggressively pitching new ideas to the Indian government for speeding up the adoption of EVs in India. At the 60th ACMA Annual Session on 5 September, Amitabh Kant, CEO, NITI Aayog, revealed that it is trying to have the GST on Lithium-ion batteries go down from 18% to 5%. The GST on Lead-acid batteries is 28%. Generally, low-speed EVs make use of Lead-acid technology.

MG Motor India DC chargers
High-end EV companies like MG and Ather Energy are installing their own charging network in India but the government could soon have fuel stations install an EV charging kiosk each.

The GST on EVs in India is 5%. Battery accounts for approximately 40% of the cost an electric vehicle. A 13% reduction in the GST on batteries would make EVs considerably cheaper. NITI Aayog sees a huge opportunity in localising EV batteries when their cost reduces to under $100/kWh.

Among other measures to drive up the sale of electric vehicles in India, NITI Aayog is proposing to extend the timeline and subsidy under the FAME II scheme by one year. In the near future, every company-owned, company-operated fuel station of state refiners may compulsorily need to have EV charging kiosks. Such a move should instill confidence in more Indians to adopt EVs.

Private companies are also doing their bit to speed up electrification in India. Tata Power, for instance, plans to install 700 fast-charging stations in big cities like Mumbai, Delhi, Pune, Bengaluru and Hyderabad by next year. Tata Chemicals, another Tata Group company, plans to establish a Lithium-ion battery plant in Dholera.