Sunday | Mar 30 2025 | 08:26:57 AM
The shares of battery manufacturers Amara Raja and Exide Industries jumped by 5 and 4 per cent, respectively, after the Centre raised the safe harbour limit to encompass lithium-ion batteries for use in electric or hybrid electric vehicles as 'core auto components', increasing the threshold to Rs 300 crore from the current Rs 200 crore.
The action is anticipated to assist battery manufacturers by reducing compliance risks, promoting investment, and enhancing India’s electric vehicle (EV) infrastructure.
Lithium-ion batteries are now categorised as 'essential automotive components' according to the regulation, meaning that firms importing them can have their reported transfer prices approved without extensive examination.
When businesses operate internationally, they might exchange goods between their subsidiaries, and the price for these transactions is referred to as the transfer price.
Tax agencies meticulously oversee these prices to guarantee that companies do not alter them to relocate profits to nations with lower taxes.
The CBDT's extension of the safe harbour means that as long as businesses report transfer prices within the allowed range, tax officials will approve them without dispute. This eliminates a significant regulatory burden and guarantees a more seamless import procedure for EV battery components.
Amara Raja shares were priced at Rs 1,080, which is up by 2 per cent compared to the previous closing on the National Stock (NSE).
Conversely, Exide Industries stocks are trading at Rs 365, increasing by more than a per cent compared to the previous close. Shares of Amara Raja and Exide have declined by 10 and 12 per cent respectively year-to-date (YTD).