Budget 2019 India: Union Budget 2019 has been introduced and there are numerous announcements for the auto sector. The Indian auto market has been on a decline and has a number of challenges ahead. With the union finances now announced, the electric vehicle manufacturers breathe a sigh of aid with GST benefits and customized obligation exemptions for sure EV elements. Here is what the business had to say
Sohinder Gill, Director Basic, Society of Manufacturers of Electric Automobiles (SMEV):
“The announcements on Electric Automobiles (EVs) in the union price range 2019-2020 deliver cheers to each shoppers as well as e-vehicle manufacturers.
To make India as an EV manufacturing hub, determination on incentivizing EV manufacturing by extending benefits beneath Part 35AD(1) is a move in the proper path. It can assist in the creation of an area manufacturing base and encourage element manufacturers to spend money on the sector. Provision of further revenue tax deduction of an amount of up to 1.5 Lakh rupees on purchase of EVs would encourage clients to go for EVs.
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Additionally, bringing down customized obligation on lithium-ion cells to nil would additional minimize down the cost of batteries and help native battery manufacturers to scale-up the enterprise. The EV business has witnessed 100% progress within the FY 18-19, and with these key measures announced in the present day, we anticipate a brighter future ahead for the business.”
Naveen Munjal, Managing Director of Hero Electric
“The electric vehicle business needed a considerable increase & help from the federal government and we welcome the federal government’s suggestion of discount of GST on EVs from 12% to 5%. In addition to this, revenue tax discount of up to Rs 1.5 lakh on the curiosity paid on EV loans is a particularly constructive transfer which can encourage clients to make a change from ICE automobiles to EVs. Reduction in customs obligation on lithium-ion cells would help local element manufacturers in scaling up the production thereby additional decreasing the general upfront value of electric automobiles in India. Authorities’s continued emphasis on FAME II initiative and strengthening of EV infrastructure will definitely encourage manufacturers to further spend money on the ecosystem thereby decreasing both crude oil imports and air air pollution leading to a cleaner and greener future.
We’re confident that such directives will increase up the rate of EV adoption in the nation and will act as a catalyst in the authorities’s goal of quicker adoption of electric automobiles and a better degree of localization underneath the ‘Make In India’ initiative.”
Shailesh Chandra, President – Electric Mobility Business and Corporate Technique, Tata Motors Ltd
“The incentives announced today by the Finance Minister, in terms of, additional interventions and steps to support the EV adoption, reinforces a strong commitment by the government to steer electrification on a faster trajectory. The proposal to lower the GST rate for EVs to 5% and reduction in duties of EV components, which we are studying, is a welcome step. It will help in further narrowing down the cost of ownership gap against ICE vehicles. Additionally, private buyers, who were earlier not considered for a subsidy through FAME 2, will now have a reason to seriously consider an EV with the tax exemption of up to Rs. 1.5 lacs. Tata Motors has been proactively participating in EV ecosystem creation, aligned to government’s vision of achieving a high EV penetration by 2030. Today’s announcement further emboldens our resolve and we will further accelerate our efforts.”
Chetan Maini, Co-Founder and Vice-Chairman, SUN Mobility
“The decision to reduce GST on EVs from 12% to 5% is a reassuring move by the Government and furthers the country’s commitment to transition to an EV future. As an EV energy infrastructure provider, we welcome the move; however it would be more beneficial for the end-user, if the Government also focus on reducing GST on charging / battery swapping services from 18% to 5% (same as that for public transport services)” stated Chetan Maini, Co-Founder and Vice-Chairman, SUN Mobility.
On the impression of the GST reduce on the prices of automobiles, he added, “This GST cut on electric vehicles will help in reducing the cost difference between ICE and EVs especially in 3-wheeler segment where the differential will now be 23% (28% – 5%). This is a big boost to EV makers to be able to create more affordable EVs.”
Naga Satyam, Government Director, Olectra Greentech:
“There were doubts in the minds of investors about the intentions of the Government in terms of the EV industry. But the announcements made in the current year’s budget must have definitely quelled their doubts. Also, with this budget the Government has made it sufficiently clear that EV manufacturing is the next big thing in its vision. Now, it is the responsibility of the industry to rise to the expectations of the Government and work towards more localization.”
Jeetender Sharma, Founder & Managing Director, Okinawa Autotech
“The Union Budget 2019-20 is very progressive and growth-oriented. The Finance Minister’s emphasis on FAME II initiative and pushing EV infrastructure will help in attracting investment for local manufacture of components which will further strengthen ‘Make in India’ initiative and ensure clean and green energy over time. Positive moves like reduction of GST to 5 percent from 12 percent on Electric Vehicles and Tax benefits up to Rs 1.5 lakh on EV Loan will make EVs affordable for consumers. With emphasis on offering upfront incentive on purchase of EVs and the push to power availability, we expect more buyers of two-wheeler vehicles to shift preference to electric two-wheelers which in turn will help the EV industry’s growth. With Rs 80,250 crore dedicated to building 125,00 km of roads in the next 5 years, the budget has also heavily focused on construction and development of roads which will be another boost towards demand from rural economy. This will positively impact the two-wheeler industry in rural sector and increase pick-up of Electric Two-Wheelers. The Government’s mission to bring e-mobility revolution to India by 2030 is a truly commendable and will provide the much needed impetus to the industry. As the government gears up for clean and green mobility, we are hopeful that India will emerge as one of the leading manufacturing hubs for electric vehicles.”
Rajeev Kapur, MD, Steelbird Helmets & President Two Wheeler Helmet Manufacturers Association
“We welcome the move of the Government to reduce corporate tax by 5% for companies having turn over up to 400cr was a long pending reform and I am sure this will create extra space for mid size companies to invest more into research, development & capacity creation. Besides, the focus area of E-vehicles will also help auto sector to transform rapidly and create a level playing field for new innovation in mobility. In the budget, Government has shown its intent on two key areas that is strengthening rural roads & national highways. It is a step worth applauding as it will lead to the better conditions and better network of roads significantly reduce fatal accidents, reduce the health care burden and improve the overall connectivity”
Parveen Kharb, CEO and Co-Founder, 22KYMCO:
“The budget announced by the Finance Minister for 2019-20 will catalyse India’s journey to electrification and will be beneficial for both, the e-mobility industry as well as consumers who are looking to make the shift to electric vehicles. The budget has a strong synergy with the FAME – II scheme and the announcement will generate a positive sentiment. Lowering GST rates on electric vehicles to 5% will make EVs more attractive to the buyer in the future. In addition, incentives on income tax will also increase the momentum for the sector. We welcome the new budget and trust that this will encourage faster adoption of e-mobility in India.”
Tarun Mehta, CEO, Cofounder, Ather Power:
“Government has already moved GST Council to lower GST on EVs from 12 percent to 5 percent and the additional income tax reduction is a major boost for end consumers to purchase EVs. It addresses the concern of the upfront cost of purchasing electric vehicles. This is the best example of a consumer driven change and is also how Ather envisions the EV sector to achieve scale and growth. It now becomes imperative that OEMs chalk out plans that allows the industry to scale up and meet the demand for compelling products.”
Maxson Lewis – Managing Director – Magenta Power
“The budget is a positive push for adoption of Electric Vehicles in India and is in line with the series of steps taken and announcements in that direction. Namely on 4 counts – 3 direct and one indirect aspect are important from that perspective. While the total cost of ownership was always in favour of EV, the announcement in the reduction of GST rate on electric vehicles from 12% to 5% reduces the upfront higher cost as against an ICE engine and improves the buying decision in favour of EVs. The additional income tax deduction of ₹1.5 lakh on interest on loans taken to purchase electric vehicles is a bonus and the industry had not anticipated that. Credits to the government for this innovative idea to push for EV.A day ahead of the budget 2019, the government lowered customs duty on import of parts and components. This will drive domestic assembling of electric vehicles, which today is plagued by Chinese imports and is actually hurting the EV industry. The EV industry primarily belongs to start ups and will not be the domain of large monoliths. The push to simply and support the Start Up ecosystem will in effect push the EV growth a lot faster.”
Pankaj Dubey, Nation Head, Polaris India
“The general vehicle portfolio of Polaris India & Indian Motorbike is being imported from the US. The increase in the customs duties on vehicle spare elements will give subsequently have an effect on the purchasers as this is more likely to lead to a worth improve on elements as the spare elements of Polaris & Indian Motorbike automobiles are immediately imported from the US.
Our expectations relating to a boost for the overall vehicle sector with regard to policies and taxation system have not been instantly met on this price range.
We do feel the finance ministry to expedite resolving instances of excessive obligation of GST on s products like snow scooters which is extraordinarily punitive @45, for a product that’s used in security and tourism improvement within the country.”
N Okay Minda, Chairman & Managing Director, UNO Minda
“I want to take this chance to congratulate Nirmala Siatharaman on her first annual finances. As a element producer, we welcome the announcement made by the government to encourage Electric Vehicle business in India with a discount in GST price on electric automobiles from 12% to five%, along with further revenue tax deduction of `1.5 lakh on the interest paid on loans taken to purchase electric automobiles. This can undoubtedly provide an impetus to the EV manufacturing in India, including up to the Authorities’s imaginative and prescient of India as a worldwide manufacturing hub for Electric Automobiles.
Authorities’s cherished EV venture may even have a serious ‘Make in India’ increase with the levy of customs obligation on import of Auto Elements and the relief of customized obligation on lithium-ion battery, which would help local manufacturers to provide reasonably priced batteries & elements to the OEMs.
We also welcome the federal government’s move to extend funding in Infrastructure, Job Creation in SME & MSME, extending help in the direction of start-ups, digital financial system and urban & rural India, which can present the best impetus in job creation and a new imaginative and prescient for India.”
Ayush Lohia CEO Lohia Auto Industries
“It’s a welcoming that authorities has decreased GST on electric vehicle from 12% to 5% & also allocated Rs 10,000 crore for quicker adoption of electrical automobiles and has announced upfront incentives for electrical automobiles. This can help appeal to investment for producer and ensure clear power over time. This determination will symbolize the subsequent era in sustainable mobility & make them a gorgeous various to shoppers. To provide more increase to E vehicle sector. We propose a more cautious, clear and real looking street map in the direction of the adoption of EVs & hoping extra constructive step shall be taken by authorities to cheer up the overall business and shopper both.
Kapil Shelke, Founder, Tork Motors
“India to make international hub of manufacturing of electrical vehicle will mean extra element manufacturing will occur in India which can help us with lowered materials value and lead time. GST of electric vehicle might be lowered from 12% to 5% is a constructive sign for start-ups like us who will soon start selling electrical motorcycles. The top value for the client will scale back. Further revenue tax deduction of Rs 1.5 lakh for interest for mortgage taken to purchase the electric vehicle will imply that the off take for EVs will go up even for premium automobiles.
Munira Loliwala, Enterprise Head – EMPI, TeamLease Providers
“Budget 2019’s targeted focus on boosting electronic vehicles is a welcome move as it will fast-track the adoption of plug-in mobility in India and build an efficient ecosystem for such eco-friendly vehicles. The tax reforms introduced by the government and the exemption of customs duty on certain parts of EV will make the ecosystem more conducive. The budget takes note of the lack of charging infrastructure for EVs and the need to invest in battery technology so that post sales and maintenance costs of EV’s are efficiently controlled. Building the infrastructure for EV should be a primary focus area and the emphasis should also be on manufacturing and production of batteries. FAME II scheme aims to provide necessary these necessary changes and encourage faster adoption of electric vehicles. While the GST reduction from 15% to 5% will enable growth in the sector, it is also important to address the increasing costs of EV components. The budget should have also looked at infusion of funds and labour at periodic intervals to ensure smooth manufacturing and development of EV technology in India. From a consumer perspective, the tax incentive and interest subvention for up to Rs 2.5 lakh will encourage more buyers in the segment.”
Rahul Sharma, Founder, Revolt Intellicorp
“This budget has been very promising for our industry. The proposal to lower GST rates on electric vehicle from 12% to 5% is a positive sign and we hope to see it implemented at the earliest. The budget is an opportunity for consumers to start adopting electric vehicles. An additional income tax deduction of 1.5 lakh on the interest paid on the loans would make the purchase more affordable. This is the start of a revolution and we believe 3 years from now things will change rapidly and India will be ahead of the curve in its adoption rate”
Bhavish Aggarwal, Co-founder & CEO of Ola
“The Government’s focus on Electric Mobility and EVs in the Budget 2019 is inspiring. Lower GST rate, interest subvention for EV loans and the commitment of Rs. 10,000 cr towards FAME 2 are encouraging. This further reinforces Ola’s mission to build Electric Mobility for India and the world and contribute toward making our nation, the global hub for innovation in this space. The various startup friendly initiatives announced as part of the budget are important for this fast-growing ecosystem and will encourage India’s youth to create value, wealth and livelihood opportunities for millions. The thrust on digital payments will further accelerate the nation towards a transparent and cashless economy.”
Pankaj M Munjal, Hero Cycles
“It has been quite a promising budget for the promotion of Electric Vehicles (EVs) in India. As the Modi 2.0 government wants to make our country the global hub of manufacturing of EVs, Nirmala Sitaraman in her budget speech has announced many steps to give a major push to the electric vehicle segment. The Government has not only lowered the GST rate on EVs from 12 percent to 5 percent but also encouraged the citizens to shift to this emission-free mobility by making it affordable. EV-owners will also get additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase the EVs. This will give the EV-owners an interest subvention for up to Rs 2.5 lakh for buying them. Even the custom duty levied on EVs has also been exempted from now onwards. These announcements will enable us to have a positive impact in creation of electric vehicular ecosystem in the long-term, thereby also resolving to lowering the air pollution in our country in accordance to our objective of promoting clean mobility. We at Hero Cycles, compliment the vision of government by inducing Electric Bicycles which can be a more immediate solution to green and clean mobility.”
Sulajja Firodia Motwani, Founder and CEO of Kinetic Inexperienced and Vice Chairperson, Kinetic Group
“The Budget 2019 introduced by Hon’ble Finance Minister in the present day is extraordinarily constructive for the Electric Vehicle sector, and re-affirms the Indian Government’s dedication to speedy electrification of India’s vehicle sector. Finance Minister has introduced approval and adoption of FAME II; Government’s detailed coverage to incentivize and help accelerated adoption of EVs; with an outlay of whopping Rs. 10,000 crores for next 3 years. This removes all ambiguity surrounding the long term EV Coverage and I’m confident that this move will encourage manufacturers to reinforce investments in this sector and clients to purchase transfer EVs.
Discount of GST on EVs from already concessional 12% to five% will make them more engaging when in comparison with engine automobiles that appeal to 28% GST. Additional, the proposed improve of Rs 1 in worth of diesel and petrol, will enhance the attractiveness of decrease operating value of EVs. The tax deduction for loans taken by clients to buy EV will even assist in creating demand from shoppers. Additional, bulletins corresponding to proposed tax breaks on Mega investments for lithium battery and cell manufacturing will pave method for a “Make in India” focus across complete supply chain of EV manufacturing in India. All in all, Government has taken a number of steps in the fitting path for a speedy improve in investments in EV by the business and adoption of EVs by the shoppers. We welcome this finances and respect Government’s dedication to decrease pollution in our cities and transfer in the direction of gasoline safety of our nation!”
Amit Raj Singh, Co-Founder, Gemopai Electric
“There is heightened interest in the EV industry, not just in India but globally too, as we all set out for a better future. Electric Vehicles is the disruption the auto industry badly needs. And the Union Budget 2019 surely has announced catalysts for the growth of the Electric Vehicles industry. The Government’s statement of purpose for making India become global hub of manufacturing EVs is welcome and much needed. As a key player, we await a more detailed plan on the same to become a partner of growth for the Government. The much needed reduction in the customs duty for components in EVs to 5% will help ship in more greener technologies and vehicles to the country. We also laud the reduction in GST on Electric Vehicles from 12% to 5%. The lowering or GST will make the transportation of future more affordable for consumers. Currently two wheelers form only 16.4% of 7.6 lakh EVs sold in FY19. The reduction in GST along with an additional IT deduction of Rs1.5 lakh on interest paid on loans for EVs, will help break the entry and perception barriers for the price sensitive Indian customers”