In Short : The India Energy Storage Alliance (IESA) has expressed its approval of the GST Council’s decision to adjust tax rates on advanced batteries within the new GST 2.0 framework. While this reform ensures that all battery chemistries are now subject to an 18 percent tax, the alliance has called on the government to extend similar tax relief to electric vehicle (EV) components and charging services.
Fueling Strategic Growth and Innovation:
Under the updated framework, lithium-ion, sodium-ion, flow, and metal-air batteries will all be taxed at 18 percent, replacing the previous system where non-lithium chemistries faced a 28 percent GST. IESA has praised this decision as a significant milestone that establishes a fair competitive environment for emerging technologies and promotes innovation in long-duration energy storage.
Maintaining Fairness While Enhancing Technological Capabilities:
Despite the favorable reform, IESA pointed out existing challenges. Requests to reduce GST on EV components from 18–28 percent to 5 percent have not been approved, with the Fitment Committee expressing concerns regarding an inverted duty structure. Likewise, proposals to lower GST on EV charging and battery swapping services from 18 to 5 percent—or to categorize them under electricity supply—were also rejected.
Impact on Clean Energy / Significance:
IESA underscored that the adjustment of battery taxes will facilitate the acceleration of clean energy adoption, particularly by aiding the development of non-lithium technologies and enhancing India’s clean hydrogen ecosystem. Importantly, the Council also lowered GST on ammonia (from 18 to 5 percent) and hydrogen fuel cell vehicles under 4 meters (from 12 to 5 percent), thereby reinforcing the country’s shift towards sustainable mobility.
About the India Energy Storage Alliance (IESA):
Founded in 2012, IESA is the foremost industry alliance in India dedicated to promoting energy storage, e-mobility, and green hydrogen technologies. By encouraging innovation, advocating for policy changes, and enabling collaborations, IESA plays a crucial role in shaping India’s clean energy and sustainable transportation landscape.
