Reserve 5% GST benefit for smaller EVs: Skoda

NEW DELHI: Skoda Volkswagen India has said that govt should reserve 5% GST benefit only for electric vehicles (EVs) that are under four-metres in length because supporting bigger and expensive cars will put pressure on the exchequer and finances.

Skoda Volkswagen India said govt should focus on smaller-sized vehicles for giving out subsidies to make EV adoption widespread.

The company has invested Rs 8,000 crore in India and is preparing for next round of expansion.

"Why do you need to support people who buy a car for Rs 60 lakh. Current GST regime is supporting much more wealthy people in terms of GST reduction. Where is the logic?" Petr Janeba, the brand director for Skoda in India, told TOI .

Asked whether 5% rate should be reserved only for cars that are targeted at the masses, he said, "Look around the world, in Europe, US, and China. They have all done it. The biggest subsidy is for mass segment. This way you accelerate EV growth much faster."

 

Janeba said by including expensive electrics for lower GST benefit, the subsidy will be consumed much faster. "If you support cars up to Rs 20 lakh, then you can support a lot of cars and have faster adoption. May be, give the benefit to cars under four metres (in length)," he said adding that the EV market should mirror taxation rates in internal combustion petrol-diesel market where benefits are given for smaller, mass-scale cars.

"At some point of time in future, there will be differentiation on EVs that are sub-four metres (in length) and others, just to follow the ICE logic. For this, you (govt) need to increase the GST on big and expensive cars and the higher range cars. Otherwise, you cannot create this subsidy for sub-four metres."

Janeba said Skoda is in the process of finalising its EV strategy for India, which will have a mix of imported expensive cars with higher range, apart from a locally-developed and competitively- priced green car.

Source::: THE TIMES OF INDIA,  dated 09/04/2024.