The rapidly expanding electric vehicle (EV) industry is urging for a reduction in the Goods and Services Tax (GST) on components and an extension of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy scheme in the 2024 Union Budget.
The industry’s appeal coincides with speculation that the government may extend the second phase of the FAME scheme until the approval of the third phase (FAME III). “At Hero Electric, we are optimistic about the government’s sustained commitment to long-term policy measures fostering EV adoption, including reduced GST rates, the continuation of FAME-II subsidies or the introduction of FAME-III, and increased investment in charging infrastructure. These steps will bolster consumer confidence and narrow the affordability gap,” remarked one expert.
Another expert highlighted the anticipation surrounding the budget, focusing on potential updates related to the FAME 3 scheme, production-linked incentive scheme incentives, and revisions to GST for two-wheelers. He emphasized the industry’s desire for a uniform 5% GST on all EV spare parts, aligning with the 5% GST on vehicles, to establish a more equitable tax structure.