GST council lowers down tax rates on electric vehicles and chargers to 5%.
In the drill of constant efforts made by the Government to promote the adaptation of electric vehicles and take firm steps towards a better future, the Goods and Services Tax council has dropped the tax rates on electric vehicles from 12% to 5% and for that of chargers the rates have gone down from 18% to 5%. That’s a noticeable difference of 7% and 13% on electric vehicles and chargers, respectively.
The modified tax rates will be in effect from 1st August 2019 and the exemption from GST on electric buses with a carrying capacity of more than 12 has also been approved. All these exemptions and reductions are done with the intent of lowering the dependence on fossil fuels.
Furthermore, the EV industry anticipates lowering down of GST on external/spare batteries to support low maintenance cost of electric vehicles. An amount of Rs 10,000/- crore has been approved by the centre to boost the adoption of EVs in India under the FAME II scheme. This scheme encourages electric mobility by investing in the right infrastructure, building charging stations, offering incentives on purchase of electric vehicles at a rate of Rs 10,000/- per kilowatt.
The hike in registration charges for ICE vehicles seems adamant. This hike is backed up by the cause of promoting the use of electric vehicles and reducing the presence of petrol/diesel vehicles. The Government has also announced a big chunk of incentives for EVs, including income tax reduction on the interest on the loan for EVs.
Last but not the least, the Government has scrapped the import duties on essential electronic components like E-drive assembly, on board charger, E compressor and charging gun.
Tax Rates On EVs
– GST on electric vehicles reduced from 12% to 5%
– GST on chargers reduced from 18 per cent to 5%
– Incentives to be provided in the form of income tax deduction on the interest of the loan for EVs