Tax Cut Likely to Boost Domestic Production of EV Parts

- Advertisement -

FM announced that new domestic manufacturing companies incorporated after October 1 will pay the income tax at the rate of 15 percent.
⦁ Sitharaman also announced tax relief for the purchase of electric vehicles in her maiden FY19-20 budget.
⦁ There is no customs duty on imports of capital goods required to establish lithium cell manufacturing unit.

Representational image

Diwali came early for India Inc as Finance Minister Nirmala Sitharaman slashed the effective corporate tax from 30 percent to 25.17 percent, inclusive of all cess and surcharges for domestic companies. Not only this, but Sitharaman also announced that new domestic manufacturing companies incorporated after October 1 will pay the income tax at the rate of 15 percent. This means the effective tax rate will be 17.01 percent, inclusive of all surcharge and cess.

This announcement seems to benefit India’s electric vehicle industry as it will help to spur the domestic production of lithium-ion batteries and electronic parts. The Indian automobile sector is one of the most prominent sectors of the country and growth in this sector has led to a surge in demand for electric vehicles which has also supplemented the growth of lithium-Ion batteries.

- Advertisement -

What industry has to say?
Vinnie Mehta, director-general of Automotive Component Manufacturers Association of India (Acma) told Livemint that the manufacturing companies will look at increasing localization of components in India under the newly announced tax regime for new units and overall manufacturing activities will get a boost.

Rajeev Singh, partner at Deloitte Touche Tohmatsu India Llp told Livemint that this could help attract investment in a few select sunrise industries around lithium-ion batteries, charging equipment and power electronics.

He also added that there are quite a few global players who are evaluating manufacturing in India and this decision should help in building a stronger business case.

Steps taken to boost EV industry
Earlier, the government has already allocated Rs 10,000 crore for Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme to encourage EV manufacturing and adoption in India and the GST rate on electric vehicles has been reduced to 5 percent from 12 percent.

In addition, there is no customs duty on imports of capital goods required to establish lithium cell manufacturing unit. Finance Minister Nirmala Sitharaman also had in her FY19-20 budget announced tax relief for the purchase of electric vehicles too.

Key Players
A report by Qurate Business Intelligence identified Future Hi-Tech Batteries, Reliance Industries Limited, JSW Group, Adani Enterprise Ltd, Mahindra & Mahindra Limited, Suzuki Motor Corp., Toshiba Corp., Denso Corp., Samsung SDI Co. Ltd., Panasonic Corporation, Toshiba Corporation, Hitachi Chemical Co. Ltd and Bharat Heavy Electricals Ltd as the key players in the lithium-ion battery in India.

By Tanya Aneja

- Advertisement -

Most Popular Articles

EKA Mobility Aims To Triple Its Capacity

0
As part of its expansion strategy, EKA Mobility is constructing a third plant in Pithampur, Madhya Pradesh, which will produce both electric buses and...
V-BAT Drones

JSW Defence Partners USA’s Shield AI To Produce V-BAT Drones In India

0
The partnerships will leverage India's engineering talent and transitioning towards more cost-effective unmanned systems JSW Defence Pvt. Ltd., a subsidiary of the $24 billion JSW...

VinFast Discusses JV With Adani Group, Megha Engg

0
An informed source mentioned that VinFast, currently establishing a factory in Tamil Nadu, has started discussions with two companies aiming to secure some of...

Tata Elxsi, DENSO, AAtek Open Robotics Lab In Frankfurt

0
The laboratory situated in Tata Elxsi's Frankfurt office will function as a centre for research and development. It will showcase demonstrations of modular automation...

Ravvi Dhyani Joins ADATA To Boost India Presence

0
Planning growth in India with exciting new products and a strong market push for 2025 expansion, ADATA names Ravvi Dhyani as Country Manager. Memory...
Abhishek Malik from Calcom Vision Limited

“India’s Electronics Sector Is Growing Rapidly, Making This The Decade For Investors To Engage”...

0
From the complexities of manufacturing and sourcing components to testing processes that drive innovation, know all the exciting dynamics shaping this ever-evolving industry in...
Sunit Kapur, CEO of Epsilon

“Epsilon Leads With Low-Carbon Graphite Manufacturing, Outpaces Chinese Competitors” – Sunit Kapur, CEO of...

0
Are LFP cathodes and silicon-graphite anodes the best for cost efficiency in EV batteries? Sunit Kapur, CEO of Epsilon Advanced Materials, discusses this with...
John W. Mitchell, President and CEO, IPC

“India’s Core Focus On 5G, IoT, AI Fosters Need For Advanced Electronics,Components, And Semiconductors”...

0
Will Industry 4.0 supercharge India’s progress in semiconductor and electronics manufacturing? IPC President and CEO John W. Mitchell shared more strategies on the country’s...
Raman M., Co-Founder and CEO, chargeMOD

“Our Goal Is To Achieve Complete Sustainability By 2025-2026” – Raman M. Of chargeMOD

0
In a conversation with Nitisha Dubey from EFY, Raman M. of chargeMOD, elaborated his goal of developing virtual power plants by decentralising power production. Q....

“Adoption Of IoT-Enabled SMT Machines Is Still In Early Phases” – Pradeep Tandon, Director...

0
While electronics are becoming smarter through the Internet of Things, is electronics manufacturing following suit? Pradeep Tandon, Director for India, Middle East, and SAARC...
Applied Materials Representational Image

Applied Materials Selects Six Startups For Deep-Tech Accelerator Programme

0
The selected deep-tech startups will be evaluated for investment by Applied Ventures and potential collaboration opportunities with Applied Materials. In collaboration with the company's India...

Space tech Startup Akash Secures $68M CHIPS Funding

0
Eyeing to power into AI, EVs, and more high-tech industries, Akash Systems lands $68 million CHIPS grant to boost its cooling tech facility, generating...

Wireless Light-Based Communication With Velmenni’s Technology

0
Velmenni is at the forefront of wireless communication innovation with its pioneering light-based technologies, Li-Fi and LC Link. Founded by Deepak Solanki in October 2014...

Harnessing AI Technology For Efficient Pest Management

0
AI-Genix, an agri-tech startup, is transforming pest management for farmers through advanced AI-enabled systems that precisely target harmful pests. In an industry where pesticides and...

One Charger To Charge All Your Devices

0
Now, there is no need to carry different chargers for different products. This Bhubaneswar startup has launched a universal 65W charger using GaN technology...

Industry's Buzz

Learn From Leaders

Startups