The 2021 Union Budget happens to be the most anticipated call for businessmen, entrepreneurs, and common man alike. It came as a surprise when there were no special allocations made for electric vehicles in the 2021 Union Budget. The future mobility electric and electric vehicle manufacturers were eager to hear some good news in the 2021 Union Budget.
New implementations in the form of the scrappage policies will boost electric vehicle sales. But, on the contrary, increased customs duties would hurt electric vehicle manufacturers as it will increase their costs in India.
What can boost electro mobility?
Research bodies need to develop a sustainable EV ecosystem in India. Many believe immediate announcements could have brought instant relief for electromobility manufacturers. There is no doubt that infrastructure spending will boost the market and build confidence in the industry. But not allocating any policies for the EV sector ends on a disappointing note.
For EVs, the main expectation was a firmer policy commitment from the govt. One of the key measures for doing so would be to fix the inverted duty structure. It should drop from 18% to 5% for batteries, and for charging/swapping infrastructure services also from 18% to 5%.
Its safe to sum up that lowering import duties would have definitely favored EV operations in India, as that would substantially reduce production costs. Another key measure is to pay due attention to the inverted duty structure on batteries. A lithium-ion battery fitted in an EV attracts 12% GST, but it has 18% GST when sold separately.
