GST Council reduced tax on electric vehicles from 12% to 5%

Petrol, diesel cars may be taxed more to push electric vehicle sales

New Delhi, July 27: GST Council has reduced the GST rate from 12% to 5% on electric vehicles. GST on Electric Vehicle Charger has been also reduced from 18% to 5%. New rates will be effective from 1st August. In addition to that Local bodies will be exempted from GST if they are hiring electric buses. These decisions were taken in the 36th meeting of the GST Council held today chaired by Finance Minister Nirmala Sitharaman.

Recently Government’s key focus is to promote e-vehicle in the country. Electric vehicle manufacturers were also demanding to reduce GST. Earlier Union Government had also announced in the budget that the benefit of rebate of income tax will be given on the loan interest amount of up to Rs 1.5 lakh on e-vehicles.

To control pollution and to stay ahead of the electric vehicle industry, Government is planning to replace all three Wheeler and two-wheeler into electric by 2023.