The automobile industry has high hopes for the electric vehicle (EV) sector and is excitedly anticipating Budget 2024. Leaders in the sector are expecting for some degree of rate rationalization to lessen interpretive challenges and litigations as they now face a complex tax framework.
Partner and Leader of Indirect Tax for Western Region at BDO India, Gyanendra Tripathi, emphasized the need for a lower GST rate on parts and components used in the production of electric vehicles (EVs) and batteries. He stated, "This would address the current issue of the EV manufacturers' accumulation of input tax credit (ITC)." In addition, he underlined the necessity of extending FAME subsidies, making EV charging's tax treatment clear, allowing ITC for charging station setup, and lowering the GST rate on entry-level two-wheelers.
The CEO and co-founder of GoMechanic, Himanshu Arora, echoed these thoughts when he expressed confidence about Budget 2024's emphasis on improving infrastructure. "Our team has been methodically and thoughtfully preparing our mechanics with the necessary skills in anticipation of the rise of electric vehicles," he stated. Additionally, he emphasized the significance of better EV maintenance facilities and charging networks.
GoMechanic's co-founder and chief operating officer, Muskan Kakkar, was enthusiastic about the budget's planned emphasis on skill-building and infrastructure projects. "These initiatives promise to bolster the ecosystem around electric vehicles, which makes our recent foray into the EV market timely," the spokesperson stated.
In the meantime, Chargeup's co-founder and CEO, Varun Goenka, emphasized the need to address other financial issues that may have a greater and more beneficial influence on the market than subsidies when it comes to the purchase of electric two- and three-wheelers. "FAME-I and FAME-II greatly benefited these segments by stimulating demand and bringing in a number of new electric vehicle manufacturers." Currently, meanwhile, the price difference between electric and traditional two- and three-wheelers is not that great. The difference will decrease much further in 2024 and beyond due to increased demand, he predicted.
Rajat Jaiswal, co-founder and CEO of KeyDroid, added to the earlier observations by expressing his expectations for the Union Budget 2024. He underlined how important it is to provide complete assistance for all parties involved in the automobile industry, including suppliers, OEMs, and customers. Additionally, he supported financial measures that include initiatives and schemes for extended clean mobility as well as skill development programmes.
The CEO and founder of Tresa Motors, Rohan Shravan, praised the government's dedication to reducing emissions and promoting sustainable mobility. He emphasized the significance of the FAME programme, which offers vital financial assistance for electric cars. He views the anticipated INR 40,000 - 50,000 crore for FAME III to cover more EVs as a positive step, because FAME II subsidies are expected to run out this year. Incentives for EV Heavy Commercial Vehicle and EV component makers were also suggested by him. Finally, Zoomcar's CEO and co-founder, Greg Moran, discussed how the previous year's budget cleared the way for a greater uptake of EVs in India. He believes that the Union Budget 2024 will open the door for ground-breaking initiatives that promote resilient economies and quicken the adoption of sustainable transportation solutions.
