Govt may take legal action against 3 firms for failing to repay FAME scheme subsidy: Report

Companies that fail to pay back the recoverable amounts will be barred from receiving subsidies in the future.

The government may take legal action against Hero Electric, Okinawa Autotech and Benling India for failing to repay the subsidy they claimed under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, a report by The Economic Times has said.

Despite repeated attempts by heavy industries ministry recover the disputed amount from these companies, they have not yet paid back the money they wrongly received, officials told ET.

The ministry may also enlist the help of investigative agencies such as the Central Bureau of Investigation (CBI) or the Enforcement Directorate for an investigation into the fraudulent activities related to the FAME scheme and establish criminal intent, the report added.

The three companies are among the firms that allegedly claimed subsidy amounts incorrectly and have the highest amount of unpaid dues.

Moneycontrol could verify the story not independently.

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The government has issued recovery notices to Hero Electric, Okinawa, and Benling. It expects to recover around Rs 155 crore from Hero Electric, Rs 125 crore from Okinawa, and Rs 50 crore from Benling. If the companies fail to clear the dues, the amount increases with each passing day, the report said.

Ampere EV, Revolt Motors, Lohia Auto, and AMO Mobility also received recovery notices but they have settled by refunding the subsidy with penal interest.

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Companies that fail to pay back the recoverable amounts will be barred from receiving subsidies in the future.

Benling India sold 29,803 electric two-wheelers from June 2020 to May 2023 under the FAME II scheme. The company received subsidy payments for just 19,986 vehicles, and an “uncleared” amount of ₹42.48 crore is still with the government, the report said. Benling India CEO Amit Kumar said the company diligently adhered to the guidelines and requirements of the FAME II scheme.