To further provide impetus to green mobility, the minister also extended the customs duty exemptions.
Finance Minister Nirmala Sitharaman announced a range of tax rebates and reduction in custom duties that are expected to push the manufacturing of automobiles, smartphones and other products in the country. While announcing the Union Budget 2023, the finance minister said that a simplified tax structure with fewer tax rates helps in reducing compliance burden and improving tax administration. She proposed to reduce the number of basic customs duty rates on goods, other than textiles and agriculture, from 21% to 13%. As a result, there are minor changes in the basic custom duties, cesses and surcharges on some items including toys, bicycles, automobiles and naphtha.
To further provide impetus to green mobility, the minister also extended the customs duty exemption on import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.
The automobile industry is lauding the announcement by Finance Minister Nirmala Sitharaman as the tax exemptions and reduction in custom duties will likely make vehicles cheaper. The new reductions are also expected to boost EV sales in India.
“Significant announcement made by the government on the customs duty exemption being extended to capital goods and machinery required for the manufacturing of lithium-ion batteries used in EVs is a boost for companies that are / would be manufacturing electric vehicles locally as it will help reduce the cost of EVs.” said Renault India CEO and Managing Director Venkatram Mamillapalle.
Lauding the budget Pankaj Sharma, Co-Founder & Director, Log9 Materials said, "The government’s decision to extend the concessional duty on lithium-ion cells for batteries for another year is definitely welcoming as it would sustain the ongoing momentum within the Indian EV sector. Considering EV batteries account for approx upto 60% of the EV cost, this relaxation will make electric vehicles more affordable and hence enhance the EV adoption rate."
“The focus on energy transition is heartening and in line with the Prime Minister's stated views. Viability Gap Funding for BESS will certainly make renewable energy storage a reality. We congratulate the Finance Minister on her progressive Budget.” said Rajat Verma, CEO & Founder, Lohum Cleantech.
V G Anil, Head of Operations, ARENQ said, “We welcome the government’s decision to allocate Rs 35,000 Cr for energy transition, & viability gap funding for battery storage. The steps will enable growth in renewable energy capacity additions & grid stability. Viability gap funding for a battery storage capacity of 4000 MWh can bring about a capex of around Rs 15,000 Cr leading to lower tariffs for storage-linked project bids. We also look forward to FM’s announcement for formulating a detailed framework for pumped storage projects which will prove a catalyst to the whole process.”
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