Electric HEMMs in Mining Industry Pushes for GST Cut and Subsidies
The mining industry is calling for subsidies and lower GST on electric HEMMs (Heavy Earth Moving Machinery) to accelerate green transition. With diesel-run HEMMs contributing significantly to mining emissions, stakeholders argue that financial incentives are essential to make electric alternatives viable and scalable.
Why Electric HEMMs Matter for India’s Mining Sector
Electric HEMMs play a critical role in reducing the carbon footprint of mining operations. However, high costs, inadequate charging infrastructure, and a steep 18% GST rate are major barriers to adoption.
Current Challenges:
- High upfront cost of electric HEMMs
- 18% GST on electric mining equipment
- Absence of dedicated subsidy schemes for mining electrification
- Limited charging facilities in mining belts
- Operational doubts in high-load, dusty environments
Industry’s Key Demands
1. Lower GST on Electric HEMMs
- Current GST rate: 18%
- Proposed rate: 5%, aligned with GST on electric vehicles
- Argument: Brings parity with other EV segments and reduces entry cost
2. Subsidy Scheme for Mining Electrification
- Similar to FAME scheme for EVs in transport
- Focus: HEMMs, loaders, dumpers, and related charging infrastructure
- Suggested model: Capital subsidy or interest subvention
3. Infrastructure Support
- Government-led charging infra in mining zones
- Priority grid access for mining EV fleets
Legal and Policy Context
- No specific subsidy yet exists under current FAME India Phases I or II for mining equipment
- GST Rate governed under Notification No. 01/2017-Central Tax (Rate) – applicable 18% for mining equipment not elsewhere classified
- Mines and Minerals (Development and Regulation) Act, 1957 mandates environmental safeguards but does not yet incentivize electrification
Global Comparison: What India Can Learn
| Country | Electric Mining Subsidy | GST/VAT Rate on Equipment |
|---|---|---|
| Australia | Yes (state-level grants) | ~10% |
| South Africa | No direct subsidy | 15% |
| India | No | 18% |
Expert View: A Practical Take
“Without fiscal support, electric HEMMs will remain a pilot experiment. A GST cut combined with targeted subsidies can change the game in just 3 years.”
— Ravi Mehrotra, Mining Consultant & Sustainability Advisor
What This Means for Policy and Industry
- A subsidy scheme can make India a pioneer in green mining
- Lowering GST will bring cost parity and attract private investments
- Collaborative models with PSU miners like Coal India Ltd can lead large-scale pilot rollouts
How Efiletax Helps Mining Businesses
If your mining firm is investing in EVs or green initiatives, Efiletax can help structure your incentives, manage GST filings, and stay compliant with ESG and green taxation norms.
FAQs
Q1. What is the current GST on electric HEMMs?
18% under general machinery classification unless specified otherwise.
Q2. Can mining firms claim input tax credit (ITC) on these purchases?
Yes, provided the machinery is used in business operations and not restricted under Section 17(5) of CGST Act.
Q3. Are there any existing government subsidies for electric mining vehicles?
No direct subsidies exist yet under the FAME scheme or other green incentive programs for this category.
Summary
The mining sector seeks subsidies and GST reduction on electric HEMMs to boost adoption. With no current government incentives, industry experts urge parity with EV norms to meet India’s green mining goals.