In a major boost, the GST Council has reduced GST on Lithium Ion Batteries from 28% to 18%. The changes would come into effect across the country from July 27 onward, Finance Minister Piyush Goyal told media after the 28th meeting of the GST Council.
Welcoming the move Indian Energy Storage Alliance (IEA) said in a release that the reduction in GST rates will catalyze the Electric Vehicle and RE-Integration market in India. The release further added that a further reduction of GST to 5% (similar to solar components) or to 12% (similar to the electric vehicle) is essential to boost the energy storage adoption in India.
The statement further thanked its Leadership Council and its member companies for their continuous effort to put this word with Ministry and Government.
In the past, IESA had sent several letters to GST council earlier on this reduction and also meet finance ministry at various occasions.
The GST on fuel cell vehicles also has been reduced from 28% to 12%. This will provide a major push towards development and adoption of Fuel cell vehicle in India.
According to IESA estimates the market for energy storage would grow to over 300 GWh during 2018-25. India is expected to attract investment in 3-5 Giga factories for advanced Li-ion batteries, attracting over $3Billion in investments in next 3 years. Already, over 1 GWh of annual assembling capacity is being set up for converting imported Li-ion cells into battery modules by various Indian companies. Opportunities include manufacturing, assembling, and energy storage project development, equipment supply, R&D of technology enhancement and much more. Energy storage has almost 20 different applications in India such as renewable integration, grid ancillary services, diesel minimization, microgrids for energy access and campuses as well as electric vehicles and charging infrastructure. The major driver for energy storage market in India are electric vehicle, renewable (solar and wind) integration and Commercial & Industrial installation to reduce diesel consumption.