This document amends a prior clarification (FAQ III, dated 11.05.2022) regarding the Production-Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry (PLI-AUTO). The amendment concerns the calculation of Domestic Value Addition (DVA) for specific components.
Specifically, it addresses the certification of minimum 50% DVA by a Testing Agency (TA) based on the invoiced/costed Bill of Material (BOM) for:
1. **Advanced Chemistry Cell (ACC):** The cell price required for assembly of Battery Power Pack is excluded on actual cost basis or up to a maximum of 25% of the price of the Battery Electric Vehicles (Ex-factory). This exclusion is applicable for the period aligning with the establishment of ACC manufacturing facilities under the PLI ACC scheme in India.
2. **Semiconductor Parts (Low Power IC, High Power IC, and Microcontrollers):** Critical Semiconductor Parts (Microcontroller, High Power IC, and Low Power IC) are excluded on actual cost basis or up to a maximum of *X* of the Ex-factory Price of the Auto Electronics (AE)/AAT Component. This applies for the period aligning with semiconductor production in India under the PLI Semiconductor scheme of MeitY or otherwise. *X* is defined as 30% for the first three years of the scheme (FY 2022-23, 2023-24, and 2024-25) and 20% for the last two years (FY 2025-26 and 2026-27). Applicants must submit a plan for Capability Enhancement to achieve deep localization of Technology-oriented child parts of the AAT Product and meet targets as per their plan.
3. **Rare Earth Magnet (REM):** REM exclusion applies until REM production commences in India. The exclusion is capped at: 1) 15% of the ex-factory price of Traction Motor and Wheel Rim integrated with Hub Motor related AAT Components, or actual cost, whichever is lower. 2) 7.5% of the ex-factory price of the Eaxle and Edifferential assembly related AAT Components, or actual cost, whichever is lower.
Approved applicants are required to submit a Domestic Value Addition certificate, duly cost-audited by an External Auditor (Cost or Chartered Accountant) and self-certified by an authorized representative, through the PLI Auto Portal.
Key Entities Referenced
PLI Scheme for Automobile and Auto Component Industry (PLIAUTO): A production-linked incentive scheme by the government to boost domestic manufacturing of automobiles and auto components.
Advanced Chemistry Cell (ACC): Refers to advanced technology batteries, specifically mentioned in the context of domestic value addition and the PLI ACC scheme.
Battery Electric Vehicles: Electric vehicles powered by batteries, relevant to the PLI scheme's incentives.
PLI ACC scheme: Production Linked Incentive Scheme specifically for Advanced Chemistry Cell battery manufacturing in India.
Semiconductors: Electronic components, including Low Power IC, High Power IC and Microcontrollers, relevant to the PLI scheme's incentives.
MeitY: Ministry of Electronics and Information Technology, the government ministry responsible for the PLI Semiconductor scheme in India.
PLI Semiconductor scheme: Production Linked Incentive Scheme for semiconductor manufacturing in India.
Rare Earth Magnet (REM): A type of permanent magnet used in various applications, including electric vehicle motors. Its domestic production is relevant to the PLI scheme's incentives.
Frequently Asked Questions-IV (FAQs-IV)
For PLI Scheme for Automobile and Auto Component Industry
(PLI-AUTO or ‘the Scheme’)
Dated: 2nd November, 2022
1. Answer to Question Number-1 of FAQ III dated 11.05.2022 is amended as below:
(i) Advanced Chemistry Cell (ACC):
“
Certification of Minimum 50% Domestic Value Addition (DVA) by Testing Agency (TA)
based on Invoiced/Costed Bill of Material (BOM) by excluding Cell Price (required for
assembly of Battery Power Pack) on actual cost basis or upto a maximum of 25% of the
price of the Battery Electric Vehicles (Ex-factory) and for the period co-terminus with
”
setting up of manufacturing facilities of ACC under the PLI ACC scheme in India .
(ii) Semiconductors parts (Low Power IC, High Power IC and Microcontrollers):
“
Certification of Minimum 50% Domestic Value Addition (DVA) by Testing Agency (TA)
based on Invoiced/Costed Bill of Material (BOM) by excluding Critical Semiconductor
Parts (Microcontroller, High Power IC and Low Power IC) on actual cost basis or upto a
maximum of X % of the Ex-factory Price of the Auto Electronics (AE) AAT Component
and for the period co-terminus with production of Semiconductors in India under the PLI
Semiconductor scheme of MeitY or otherwise. The applicants seeking to take benefits
are required to submit their plan for Capability Enhancement to achieve deep localization
during the scheme period for Technology oriented child parts of the AAT Product and
achieve the targets as per their plan.
Where,
X = 30% for first three years of the Scheme period i.e FY 2022-23, 2023-24 and 2024-25
and
”
X = 20% for last two years of the scheme period i.e. FY 2025-26 and 2026-27.(iii) Rare Earth Magnet (REM):
“
Certification of Minimum 50% Domestic Value Addition (DVA) by Testing Agency (TA)
based on Invoiced/Costed Bill of Material (BOM) by excluding Rare Earth Magnet (REM)
as follows for the period till production of REM in India.
1. 15% of the ex-factory price of the Traction Motor and Wheel Rim integrated with Hub
Motor (related AAT Components) or actual cost whichever is lower.
2. 7.5% of the ex-factory price of the E-axle and E-differential assembly (related AAT
”
Components) or actual cost whichever is lower.
The approved applicant will submit the Domestic Value Addition certificate duly
cost audited by External Auditor (Cost or Charted Accountant) and self-certified by
the authorized representative of the approved applicant through PLI Auto Portal.