Anomaly by Oversight ?
====================
Surely , it cannot be by design !
I am talking of GST rate of 28 % on
imported Lithium-ion batteries required for electric vehicles , whereas GST
rate on finished EV is fixed @ 12 % !
Consider this “ anomaly “ in the following background
:
·
Li-ion batteries make up almost 50 % of the Selling Price of a EV . This
means , the battery cost in those 10,000 Electric Cars which EESL ordered last
month on TATA / M&M , for Rs 11 lakh each , would be approx. Rs 5.5 lakh !
·
·
If GST on these imported batteries was reduced to 12 % , the cost of
manufacture of EV , would come down by Rs 0.70 lakh .
·
·
Then @ 12 GST on finished car , price to EESL could have come down by
another Rs 8,000 per car , taking the total saving to EESL of Rs 78,000 per car
·
·
According to one report , EESL plans to purchase some 5.5 lakh Electric
Cars over the next 3 years to replace the entire current fleet of
Government . You can calculate the savings !
·
·
It is another matter that “ Purchasing “ is in itself , a BAD idea
! I have pleaded with EESL to “ Lease “ these cars ( from the
manufacturers ) and save thousands of crores of rupees !
Read : To Buy
or not to Buy ? [ 11 Oct 2017 ]
https://myblogepage.blogspot.in/2017/10/to-buy-or-not-to-buy.html
·
It seems , the Government / EESl are “ considering “ the option of
buying these cars ( and lakhs of electric rickshaws ) , WITHOUT Li-ion
Batteries , in order to bring down the initial investment . Government is
hoping that private parties will invest into huge inventory of such batteries
and get into “ Battery Swapping “ business ( - hopefully , to offset the
absence of battery charging stations ) .
·
With
a GST of 28 % on bare batteries , this battery swapping business is unlikely to
take off !
I do hope the next meeting of GST
Council expected to be held on 10th Oct , would reduce the GST rate
on Li-ion Batteries to 12 %
Oversight can always be overcome !
03 Oct 2017
www.hemenparekh.in
/ blogs
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