Ministry of heavy industries issued recovery notices to 7 cos for 469 cr
Return subsidy or face legal action
In last fiscal year, the ministry of heavy industries suddenly stopped the disbursal of subsidies under the FAME II scheme after receiving anonymous emails alleging that several electric vehicles companies were claiming subsidies without meeting the Phased Manufacturing Plan (PMP) norms meant to increase indigenisation, investments and employment in the country.
Now in a latest, the govt. has asked the companies under investigation to refund the money they wrongly claimed under its Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme or lose their eligibility to participate in the third leg of the subsidy programme.
Despite all this, the companies barred from FAME claims kept selling EVs at incentivised rates.
According to a report by Economic Times, citing a government official privy to the matter, companies that are under investigation for wrongly claiming subsidies will have to first refund the money to the government, and only then would they be allowed to continue participating in the scheme.
Earlier in this fiscal year, Recovery notices totalling Rs 469 crore had been sent to seven companies — Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto and Amo Mobility — for allegedly violating local sourcing norms. Fame-II scheme mandates at least 50% local sourcing. Local sourcing is a process that refers to acquiring materials or products from manufacturers within the country. Instead of sourcing international supplies, the business opts to buy from local manufacturers.
Automotive Research Association of India (ARAI) is investigating the alleged violations. ARAI, the automotive R&D organization, under the Ministry of Industries, is also responsible for testing the localization percentage before the EV is certified for sales.
Revolt Intellicorp, Amo Mobility agreed to return the amounts claimed. Amo Mobility says it has passed on 11 crore subsidy.
While Benling India has asked for the due amount to be deducted from future payments of subsidies, other EV companies have been asking the government for relief on the payments.
Earlier in last December, the Ministry said it had received complaints against 12 companies, including Hero Electric and Okinawa Autotech.
As per other media reports, previously, three-wheeler manufacturers, including — Victory Electric Vehicles, Thukral Electric, and Best Way Agencies— have had their subsidies paused, for reasons including sourcing imported parts for vehicle production or using unapproved outdated battery technology. Other companies like Atul Auto, Euler Motors, and Dilli Electric, subsidies have paused due to delays in compliance certification or discontinuation of the certified vehicle.
The government has made its clear that companies which do not refund the subsidies will have to face legal action.
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