GST Council Lowers Tax on Electric Vehicles, Chargers to 5%

The GST Council chaired by Finance Minister Nirmala Sitharaman has announced that it has decided to cut GST rates on all electric vehicles (EVs) to 5 percent from the present 12 percent and has cut the existing 18 percent GST on electric vehicle chargers or charging stations to 5 percent.

In order to deliver more environmentally friendly transportation, the Finance Ministry has also given exemption from GST on the employing of e-buses by local authorities. This exclusion is for those buses which can carry over twelve passengers.

According to the Finance Ministry declaration, these changes will be operative from August 01, 2019.

Responding to the news, the Society of Manufacturers of Electric Vehicles (SMEV) has received the government’s move by saying that it is in line with the government’s actions taken to encourage EVs in the last few months.

“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 percent reduction in GST as it will reduce the gap between the EVs and the IC Engine vehicles. If FAME-II was a dampener, the GST reduction is certainly a bright spot in the National EV policy,” believed Sohinder Gill, director general of SMEV.