Proposals for reduction of tax rates for electric vehicles (EVs), solar power generating systems and wind turbines will be discussed at the 36th meeting of the Goods and Services Tax (GST) Council, to be held on July 25.
The meeting will happen through video conferencing on Thursday, the Finance Ministry said Sunday.
In its previous meeting held last month, the Council had referred the issue relating to GST rate cut on EVs, chargers and hiring of EVs to the rate fitment committee, which is an officers level committee.
The recommendations of the officers committee are likely to be placed before the Council on July 25, officials said.
To push domestic manufacturing of EVs, the Centre has proposed to the Council to slash GST rates to 5 per cent from 12 per cent, which even found mention in Finance Minister Nirmala Sitharaman’s Budget 2019-20 speech. “The government has already moved GST Council to lower the GST rate on electric vehicles from 12 per cent to 5 per cent,” Sitharaman had said in her July 5 speech. She had also announced additional income tax deduction of 1.5 lakh on the interest paid on loans taken to purchase EVs.
GST rate for petrol and diesel cars and hybrid vehicles is in the highest slab of 28 per cent with cess levied over and above it.
The Council will also consider tax structure for solar power projects. The Delhi High Court had in May asked the GST Council to take a relook at the taxation structure following industry petition. The government had earlier said that for the purpose of taxing solar power projects, 70 per cent of contract value would be treated as goods, taxable at 5 per cent, and balance 30 per cent as services, taxable at 18 per cent. The solar industry has been pitching for a different ratio for splitting goods and services for levying GST.
The Council may also look at consolidation of tax rate of lotteries. In the previous meeting, after deliberations on various issues on rate of lottery, the Council had recommended that certain issues relating to taxation (rates and destination principle) would require legal opinion of Attorney General. Currently, a state-run lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax rate under the indirect tax regime.