New Delhi: GST Council has decided to reduce GST rate on Electrical Vehicles from 12 per cent to 5 per cent on Saturday.
It also recommended a reduction in GST rate for electric vehicles (EV) Chargers from 18 per cent to 5 per cent. GST Council also approved exemption from GST on hiring of Electric Buses with a seating capacity of more than 12 passengers by local authorities.
These changes will be effective from August 1, according to an official statement.
Reduction in rate of tax:
| Items | Existing Rate | New Rate |
| Electric Vehicles | 12% | 5% |
| Charger or Charging Stations for EVs | 18% | 5% |
| Hiring of Electric Busses | 12% | 0% |
India is making a big push for electric vehicles to control air pollution and take a lead in the emerging industry. The government wants to have only electric three-wheelers operating in the country by 2023 and only electric two-wheelers by 2025.
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The 36th GST Council Meet was presided over by Union Finance Minister Nirmala Sitharaman through video conferencing at Ministry of Finance. Minister of State (Finance) Anurag Thakur was also present.
In other decisions, the council said the last date for filing of intimation in Form GST CMP-02 for availing the option of tax payment has been extended from July 31 to September 30.
Besides, the last date for furnishing statement containing details of self-assessed tax in form GST CMP-08 for April to June quarter by taxpayers under composition scheme has been extended by a month to August 31.
This was the first GST Council meet after the Union Budget presentation on July 5.
In the Union Budget 2019-20, the government provided additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase EVs.
Besides, customs duty has been exempted on certain parts of EVs to further incentivise e-mobility in the country.
The Centre has also approved Rs 10,000 crore to encourage faster adoption of EVs in the country under the FAME II scheme, which aims to encourage faster adoption of such vehicles by right incentives and charging infrastructure.
"The tax benefit will help create an ecosystem that will encourage faster mass adoption of EVs in our society," Hyundai Motor India Ltd (HMIL) MD and CEO S S Kim said in a statement.
The company had recently launched its full electric SUV Kona priced at Rs 25.3 lakh.
"We are thankful to government of India for fulfilling their promise as this strategic decision by GST Council will further strengthen confidence of prospective buyers for electric mobility in future," he added.
Expressing similar sentiments, Mahindra & Mahindra Managing Director Pawan Goenka tweeted, "One more bold enabling step by GoI (government of India) to support EV movement. With the GST rates coming down the financial viability for 3W and even 4W for shared mobility becomes positive. Now let us just do it."
