India Energy Storage Alliance (IESA) has called for tax deductions on lithium-ion batteries to help the country’s growing electric vehicle and renewable energy storage markets.
Not content with a tax cut, IESA has gone a step further in also calling for a sales ban of internal combustion engined two and three-wheelers in highly polluted cities.
In 2020, the goods and service tax (GST) council reduced the rates on electric vehicles from 12% to 5%. Battery with solar is at 5% and the GST for lithium-ion stationary storage batteries is at 18%.
Dr. Rahul Walawalkar, president of IESA, told Indian news outlet Telangana Today: “Thus, a level-playing field for GST on batteries for all energy storage technologies and applications is the need of the hour. We request the Finance Ministry to consider allowing stationary energy storage systems used in the hybrid projects to avail the 5% GST allowed for renewable energy devices and related systems.”
India’s battery use in stationary and motive applications is expected to grow rapidly in the next decade.
The electric vehicles (EV) market in India hit around 4.98 lakh (million) units last year and is expected to grow at a CAGR of 36% by 2026.
The total capacity of energy storage added in 2018 was around 4.75 GWh and is expected to grow to 28GWh by 2026.