Budget 2021 | 'Incentivise EV manufacturers when it comes to R&D'

By Mohal Lalbhai

The automotive industry is definitely looking at 2021 to be the ‘Year of the EV’.

We would like an important anomaly with regards to the tax on batteries to be revised. There is an 18 per cent GST on the replacement of Lithium ion batteries for electric vehicles but the GST on vehicles is 5 per cent.

We would like a reduction in the GST on the replacement cost of batteries for EVs and bring it in line with the overall policy.

The second expectation is that under FAME II subsidy, the Government has put a cap of Rs 1.5 lakh on the ex-factory price of the vehicle on which subsidy is applicable. This is a 5-year-old price point, and with the moving commodity prices, we would expect the government to increase this limit by at least an additional 10 per cent to Rs 1.65 lakh.

Finally, we would like to urge the Government to incentivise EV manufacturers when it comes to R&D. Given the Government’s clarion call for ‘Aatmanirbhar Bharat’, India needs to take the lead when it comes to the development of new technologies that go on to redefine motor vehicle transportation for decades.

The Government should incentivise manufacturers and academia to collaborate together to make this happen.

(The author is Founder and CEO, Matter)