Mar 15: Under FAME-India Scheme, incentives are provided to buyers of electric vehicles in the form of an upfront reduction in the purchase price of electric vehicles. The incentive is linked to battery capacity i.e. Rs. 10,000/KWh for e-3W and e-4W with a cap of 20% of the cost of the vehicle. Further, the incentive/ subsidies for e-2W have been increased to Rs. 15,000/KWh from Rs. 10,000/KWh with an increase in cap from 20% to 40% of the cost of vehicle w.e.f. 11th June 2021.
As per the information received from the Department of Revenue, at present, the GST rate on electric vehicles is 5%. The GST rates are prescribed based on the recommendations of the GST Council. Electric vehicles are already at the lowest rate slab of 5%. Further, the following steps have been taken by the Government for the adoption of electric vehicles in the country:
- The Government on 12th May 2021 approved a Production Linked Incentive (PLI) scheme for manufacturing of Advanced Chemistry Cell (ACC) in the country in order to bring down prices of batteries in the country. Drop-in battery price will result in cost reduction of electric vehicles.
- Electric Vehicles are covered under Production Linked Incentive (PLI) scheme for Automobile and Auto Components, which was approved on 15th September 2021 with a budgetary outlay of Rs. 25,938 crore for a period of five years.
- GST on electric vehicles has been reduced from 12% to 5%; GST on chargers/ charging stations for electric vehicles has been reduced from 18% to 5%.
- Ministry of Road Transport & Highways (MoRTH) announced that battery-operated vehicles will be given green license plates and be exempted from permit requirements.
- MoRTH issued a notification advising states to waive road tax on EVs, which in turn will help reduce the initial cost of EVs.
