Close on the heels of unveiling a host of incentives for electric vehicles by the government, the high-powered GST Council on Saturday decided to reduce GST rate on electrical vehicles from 12 per cent to 5 per cent and on EV chargers from 18 per cent to 5 per cent from August 1.
The Council has also approved an exemption from GST on the hiring of electric buses by local authorities.
GST Council decides to cut GST rate on electric vehicles from 12% to 5% and on EV chargers from 18% to 5% from August 1, 2019. GST Council also approved GST exemption for hiring of electric buses by local authorities. @IndianExpress
— Aanchal Magazine (@AanchalMagazine) July 27, 2019
The 36th meeting of the council, chaired by Finance Minister Nirmala Sitharaman, was held via video conferencing.
The Society of Manufacturers of Electric Vehicles (SMEV) welcomed the reduction of GST on electric vehicles, 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.
After considering the promotion of electric vehicles in the Union Budget, the government has been urging states to promote eco-friendly vehicles in an effort to curb rampant pollution afflicting most of the major cities.
Earlier this month, the ministry of road transport and highways had asked all states and Union territories (UTs) to provide incentives for electric vehicles (EVs).
(With PTI inputs)