The India Energy Storage Alliance on Wednesday said batteries, regardless of the technology, should be taxed at the same 5 percent GST rate as electric vehicles to support the nascent industry. Ahead of the Union budget, India Energy Storage Alliance (IESA) President Debi Prasad Dash told PTI that the government may consider protecting domestic cell and battery component manufacturers due to increased imports of lithium-ion cells, which have risen to Rs. 24,000 crore in FY24 from Rs 18,000 crore in FY23, mainly from China.
There is an imbalance in the tax structure of batteries, he said, adding GST for lithium-ion batteries at 18 percent, but other chemicals, such as lead acid, sodium, and flow batteries and others, at 28 percent. On the other hand, for electric vehicles, the GST is 5 percent.
“Therefore, as an industry, we need to support this emerging sector, and all new technologies should be taxed at 5 percent, and there should be no difference between different technologies,” said Dash.
He was responding to a question on IESA’s wish list for the upcoming Union Budget.
Dash further said that there is a need for the government to support the manufacturers of battery components such as cathode, anode, electrolyte, separator and copper foils for the ‘Make in India’ campaign to make battery cells successful.
“This industry (components) is a big industry, but it cannot grow without the support of the government because a lot of investment is needed. We at IESA have contacted many ministries and sent a request like PLI for a support plan of Rs 9,000 crore for this industry,” Dash added.
Such support will enable these companies to not only supply Indian gigafactories but will also have the opportunity to export, he said, adding that there is a need for government support for capacity building and capacity building in the industry.
When asked if the nascent domestic industry needs protection from increased imports from China, Dash said that through the PLI program, the government has taken the first step to support Indian cell manufacturing and gigafactories.
The government could look at other measures such as increasing the customs duty over time so that Indian companies have a better pricing model, he added.
“In the last two years, in FY23, we saw around Rs 18,000 crore of lithium-ion cell imports, which increased to Rs 24,000 crore in FY24,” Dash noted.
