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Solar energy storage manufacturers want lower GST levy on batteries

According to reports, solar energy storage manufacturers have sought lowering the Goods and Services Tax levy on batteries.

In a letter to Minister of State (Independent Charge) for Power, Coal, New & Renewable Energy, and Mines, Piyush Goyal, the India Energy Storage Alliance said, “We believe the rates currently proposed for these components if applicable also to secondary batteries (that is rechargeable batteries/energy storage) could hinder the adoption of energy storage in grid applications such as energy access/Renewable Energy (RE) integration as well as large-scale adoption of Electric Vehicles (EV) in the country.”

The industry has suggested that primary cells and batteries should be classified in the 5 per cent slab under devices for renewable energy projects and spare parts. The equipment is currently taxed in the 28 per cent per cent slab according to the rate schedule released on May 18. In the representation, the industry has also sought lowering the tax rate on waste and scrap of spent primary cells and batteries from 18 per cent to 5 per cent.

In its representation, the industry said, “Over 1000MWh of Lithium-ion batteries have already been deployed across telecom towers in India for diesel minimisation. The proposed tax structure could slow the momentum of this progress from an economic viability point of view.”

The push towards reaching a 100 per cent Electric Vehicle (EV) nation by 2030 will also receive a set back from the GST rate. The industry said, “Batteries are a major cost component of Electric Vehicles (EVs) accounting for nearly half of the total cost of the vehicles…Under the proposed slab of 28 per cent for batteries, the cost of EVs would increase significantly from their current prices.”

It added, “We believe the proposed tax slab of 28 per cent for batteries would dampen the consumer interest in EVs as the costs are expected to increase.”

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