7% GST cut on e-vehicles cheers city manufacturers

Ludhiana: In a big boost to city’s electric vehicle manufacturing units, Union finance minister Nirmala Sitharaman on Friday proposed to slash GST on e-vehicles by 7%, bringing it down to 5% from the present 12%.
Ludhiana, which is slowly becoming a hub of e-vehicle manufacturing, has specialized units engaged in production of e-rickshaws, e-scooters and e-dumpers. And over the years, alongside corporates, smaller companies too have entered the field. City manufacturers are jubilant over Friday’s development. They say GST cut will prove to be a gamechanger for the industry.
The businessmen, who are eagerly awaiting the formal notification of GST reduction, are also of the view that the government should make financing of e-vehicles easy. According to Onkar Singh Pahwa, chairman of Avon Cycles, which ranks among top five manufacturers of e-vehicles in the country, “This is highly appreciable and much-awaited initiative that will boost the demand and sales of e-vehicles in India. The effective price cut after the GST reduction of 7% is a win-win situation, both for the customer and the manufacturers. This will also encourage manufacturers to do more R&D and bring out new products. But at the same time, the government should also look at the possibility of easy and hassle-free financing of e-cycles, e-scooters, which is impossible at present. If products like mobile phones and LED TVs can be easily financed, then why not e-vehicles?”
According to KK Seth, chairman of Neelam Cycles, “The GST cut will be a boon for manufacturers. At present, our products, like e-rickshaw, are very costly, but now rates will come down. It is a great move and once implemented, it will encourage more businessmen to come forward and set up units for manufacturing of e-vehicles and components in Ludhiana. But the government should also ensure that once the GST is reduced to 5%, we are given the entire GST credit on our purchases in which some items are taxed at 28%. As per the present norms, manufacturers cannot claim input tax credit on items on which GST is 5%. If this does not happen, the move to reduce GST will prove to be of no help.”