GST Deduction on Lithium-ion Batteries: Proposes EV Industry

India Energy Storage Alliance (IESA) requested the government to reduce GST on lithium-ion batteries to 5%. The idea here is to seek an extension to the FAME II subsidy along with reduction in GST in order to facilitate EV transition.

"We expect the upcoming Union Budget 2024 to consider a special incentive program for battery raw materials and chemical processing and tax incentives which will bring more investments to India’s fast-growing energy storage industry. Also, the rationalisation and reduction of GST rates to 5% for batteries for different applications across e-mobility and stationary storage would result in a reduction of overall system cost immediately," said Rahul Walawalkar, founder and president of India Energy Storage Alliance and President and managing director of Customized Energy Solutions (CES) to media.

As of now, lithium-ion batteries attract 18% GST.

IESA also seeks extension of the production-linked incentive (PLI) scheme for ACC battery manufacturing considering the large-scale requirement of battery storage in the country.

IESA recommends that the government reduces the GST rate on lithium-ion batteries to 5% in belief that this can turn to be a game-changer in facilitation of the expansion of large-scale energy storage deployment and e-mobility in India.