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GST Council cuts tax rate on electrical vehicles, chargers to 5 per cent

GST Council meet concluded on Saturday with a decision to reduce GST rates on electric vehicles and charges. The GST Council has decided to reduce GST rate on electrical vehicles from 12 per cent to 5 per cent. The council has also approved an exemption from GST on hiring of electric buses by the local authorities.

India TV Business Desk India TV Business Desk
New Delhi Updated on: July 27, 2019 13:42 IST
GST Council: GST rate on Electrical Vehicles slashed from

GST Council: GST rate on Electrical Vehicles slashed from 12% to 5 %; reduced rate effective from August 1

GST Council meet concluded on Saturday with a decision to reduce GST rates on electric vehicles and charges. The GST Council has decided to reduce GST rate on electrical vehicles from 12 per cent to 5 per cent. The council has also approved an exemption from GST on hiring of electric buses by the local authorities.

It also slashed the Goods and Services Tax (GST) on EVs chargers (electric vehicles chargers) from 18 per cent to 5 per cent, an official statement said post the 36th meeting of the council. The new rates will be effective from August 1, 2019. 

Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) said, "The Government is lately showing very clear intentions of promoting EVs and GST reduction is one such measure in line with the series of actions taken by the government in the last few months. We welcome the 7% reduction in GST as it will reduce the gap between the EVs and the IC Engine vehicles. If FAME 2 was a dampener, the GST reduction is certainly a bright spot in the National EV policy. The EV industry now awaits the corresponding reduction of the 18% GST in the spare batteries as it will help maintain the low running cost of EVs over their lifetime."

The meeting, chaired by Finance Minister Nirmala Sitharaman, was held via video conferencing.

Meanwhile, the Society of Manufacturers of Electric Vehicles (SMEV) welcomed the reduction of GST on electric vehicles to 5 per cent, saying it is in line with the government's steps to promote eco-friendly mobility, even as it sought a similar cut in spare batteries.

SMEV Director General Sohinder Gill said with the reduction in GST, the gap between prices of EVs and internal combustion engine vehicles will also be reduced and will thus play a part in faster adoption of electric mobility.

"The government is lately showing very clear intentions of promoting EVs and GST reduction is one such measure in line with the series of actions taken by the government in the last few months," Gill said in a statement.

(With PTI Inputs)

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