We Want Clear Cut Long Term Policy For EVs: Ayush Lohia, CEO, Lohia Auto
In goods and services tax (GST), the most crucial taxation reform since India’s independence, electric vehicles (EVs) are given maximum perks. Not only EVs are placed in the lowest tax bracket, but are also being encouraged as the future fuel. However, absence of a long term vision and certain clarities in the new tax regime may effect industry’s growth in the long run.
Ayush Lohia, CEO of Lohia Auto said that government is not clear with its electric vehicle policy.
“They are not clear how they are going to implement it. Like earlier, we were talking about the FAME scheme, then a new policy is coming up. Also, everything is now shifted to Niti Aayog from other department. We need a clear cut long term policy for EVs,” Lohia Said.
Government of India has announced that it will come up with Electric Vehicle Policy with the key objective of having only electric vehicles on road from 2030.
Company like Lohia Auto see big opportunity for itself in future given proper assistance by the government in terms of policy and infrastructure. Lohia said that there are certain blemishes in GST which needs to be clarified.
Lohia said, “In the EV industry, the input tax is almost 28 per cent and output is 12 per cent. There is no clarity whether we will get a refund or not on the gap. If we will not get the refund then it is a cost for us.”
He added that if they are denied refund, it will impact the cost by 14 per cent. Increase in key components price post GST is another thing which needs to be answered.
The GST Council has set a 12 per cent tax rate for electric vehicles, compared with 28 per cent plus cess for petrol and diesel cars and hybrid vehicles. Few key components for EVs are now taxed at 28 per cent compared to just 6 per cent excise in the previous tax regime. Moreover, in certain states prices for EVs have gone up post GST.
"Five states had 0 per cent VAT on electric vehicles and levying 12 per cent GST will increase the cost and negatively impact sales,” Lohia said.
He added that the industry is consulting the issue with many forums to take the issue to the government.
The CEO said that the company is growing at a rate of 100 per cent year-on-year on the back of diverse portfolio and plans to achieve Rs 500 crore revenue mark by 2020. The group manufactures e-rickshaw, e-scooter, and diesel powered three-wheelers and has partnership with US based UM Motorcycle to sell UM brand bikes in India. The company has a manufacturing plant in Kashipur and has invested Rs 100 crore in it so far.
When asked whether the company will make electric powered four-wheelers in future, Lohia said they are exploring the space.
“Five years down the line, yes we can,” said Lohia, adding that they will soon come up with new e-scooter and e-rickshaw. The Noida based company has set a target to sell 15000,-20,000 units of e-rickshaw and three-wheelers. Last year, it roughly sold 6,000 units in both categories.
