Government Planning On Import Tax On Lithium-Ion Cells: Report

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  • The report also said that that there may also be an output-linked cash subsidy based on kilowatt hours (KWh) of cells sold
  • There are geopolitical reasons as well behind devising such an incentive scheme for lithium cells

As per a report by Livemint, India plans to impose tariffs on imports of lithium-ion cells for as long as a decade. The report also said that it plans to offer incentives to boost local manufacturing as part of the effort to reduce trade ties with China as per two people aware of the developments.

The report said that one of the people requesting anonymity said that the Indian government has taken note of China’s dominance in this space. There are geopolitical reasons too behind devising such an incentive scheme for lithium cells.

Output-linked cash subsidy

As per the report, the government plans to offer incentives such as 100 per cent tax deduction of capital expenditure in the first year of operation under Section 35 AD, concessional financing options by giving companies deemed infrastructure status and waiver of minimum alternative tax. The report also said that there may also be an output-linked cash subsidy based on kilowatt-hours (KWh) of cells sold. It added that the ministry of heavy industry has been working on this proposal along with NITI Aayog.

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The report said that the second person seeking anonymity said that till March, the ministries and NITI Aayog were working on the proposal. The COVID-19 pandemic can delay the introduction of the scheme added the report.

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