With the Goods & Services Tax (GST) Council scheduled to satisfy early subsequent week to deliberate on rationalisation of the tax construction, German carmaker BMW India has urged the rate-fixing physique to retain the existing 5% slab for all passenger electric automobiles (EVs) to toughen e-mobility.
“We hope that the sustainable push towards electric cars will continue to be encouraged as a priority and will reflect in the GST strategy by retaining the existing 5% GST on all passenger electric vehicles,” mentioned Hardeep Singh Brar, President and CEO, BMW Group India.
“BMW Group India has been an early proponent of e-mobility in India, strategically investing towards expansion and localization of electric product portfolio. An adverse impact from GST rates can derail the vision of high electric adoption and local production in India,” he mentioned.
Stating that the current hypothesis in regards to the change in GST charges had precipitated uncertainty within the minds of customers, he mentioned client curiosity and demand was sturdy, however they’d adopted a wait and watch strategy, and this delayed decision-making was impacting new car gross sales at a sure degree.
“Expediting clarity on GST rates is essential to get back to speed and ensure auto sector’s contribution to economic growth during this quarter is robust,” he mentioned.
Commenting on the topic, Ajinkya Firodia, Vice Chairman, Kinetic India which is into two- wheelers, mentioned rationalisation of GST was a good suggestion to take away complexity and produce about uniformity and the proper route for the nation.
“However, there are reports of tax reduction only in smaller capacity vehicles (up to 300 cc) and an increase in above 300 cc. Since the majority of the market, over 2 crore per annum, is already in the lower category, there is no need to create this divide and a mid ground but common tax should be implemented,” he mentioned.
Urging the GST Council to help EVs, he mentioned EVs, after all these years of subsidy, have been lastly getting accepted and rising; nevertheless, penetration was nonetheless in single digits at 9 p.c.
“Hence, we should consider subsidy continuation and enhancement for 5 years clearly, till there is a 40–50% shift to the same,” he mentioned.
“For funds, therefore, we needn’t rationalise from 28% to 8% but can instead make a common 15% for petrol and enhance subsidy back to 15,000 per kWh. This will serve all purposes,” he added.
