How Do GST Reforms on Batteries Impact EV Parts and Charging Services?
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Synopsis
The India Energy Storage Alliance applauds the new GST 2.0 regime for advanced batteries while pushing for lower taxes on EV parts and charging services. This article delves into the implications of these reforms and the ongoing discussions for further adjustments. Stay informed on how these changes could shape the EV landscape in India!
Key Takeaways
- The GST 2.0 reform standardizes battery taxes at 18%.
- IESA recommends further tax reductions for EV parts.
- Focus on supporting non-lithium battery technologies.
- Pending proposals on EV charging services remain unresolved.
- Continuous dialogue is encouraged for future reforms.
New Delhi, Sep 8 (NationPress) The India Energy Storage Alliance (IESA) expressed its approval of the newly implemented GST 2.0 framework on Saturday, which has streamlined tax rates for advanced batteries. However, they urged the government to consider reducing the tax on electric vehicle (EV) components from the current 18–28 percent range down to a mere 5 percent.
Under the modified GST scheme, all types of batteries, such as lithium-ion, sodium-ion, flow, and metal-air chemistries, will now incur a consistent tax rate of 18 percent. This adjustment replaces the previous system where lithium-ion batteries were taxed at 18 percent, while other battery types faced a 28 percent levy.
The IESA hailed this adjustment as a “significant milestone” that fosters equal competition for non-lithium technologies and promotes innovation in long-duration energy storage solutions.
“Nevertheless, several crucial recommendations are still pending and are being actively reviewed. The appeal to lower GST on components used in the creation of electric vehicles from 18 percent or 28 percent to 5 percent remains under consideration, with the Fitment Committee citing issues related to an inverted duty structure,” stated the industry organization in a press release.
IESA President Debmalya Sen commented: “For the Clean Hydrogen ecosystem, the GST on Ammonia has been decreased from 18 percent to 5 percent, and the GST for hydrogen fuel cell vehicles under 4 meters has dropped from 12 percent to 5 percent. While we submitted other recommendations as well, we are pleased that some of our suggestions were acknowledged.”
Concerning the other outstanding proposals, the IESA encouraged continuous dialogue to resolve duty inversion and to further bolster domestic manufacturing.
Likewise, the suggestions to reduce GST on EV charging and battery swapping services from 18 percent to 5 percent, or to categorize them as electricity supply, have not received approval, as noted by the IESA.
The Council, adhering to the Fitment Committee’s recommendations, has decided to clarify the nature of the service but will retain the existing GST rates for the time being, according to the release.
Point of View
The ongoing reforms in GST related to batteries and EV components are crucial for the growth of green technology in India. The discussions led by the IESA underscore the importance of fostering innovation while ensuring fair taxation. As we move toward a more sustainable future, these conversations will shape the landscape of the electric vehicle market in our country.
NationPress
08/09/2025
Frequently Asked Questions
What is the new GST rate for batteries?
The new GST rate for all battery types, including lithium-ion, sodium-ion, flow, and metal-air, is now set at a uniform 18 percent.
Why is IESA requesting a reduction in GST for EV parts?
IESA is advocating for a reduction of GST on EV parts from 18-28 percent to 5 percent to support the domestic EV manufacturing sector.
How have GST rates changed for Clean Hydrogen?
The GST on ammonia related to the Clean Hydrogen ecosystem has been reduced from 18 percent to 5 percent, while hydrogen fuel cell vehicles under 4m have seen their GST drop from 12 percent to 5 percent.
What is the current status of GST on EV charging services?
The proposals to reduce GST on EV charging and battery swapping services from 18 percent to 5 percent have not yet been approved.
What does the IESA suggest for future discussions?
IESA urges ongoing engagement to further address duty inversion issues and enhance support for domestic manufacturing in the EV sector.
