GST reduction on electrical vehicles, chargers

The GST Council has decided to cut GST rate on electrical vehicles from 12% to 5% and on EV chargers from 18% to 5%, with effect from August 1. An exemption from GST on the hiring of electric buses by local authorities has also been approved by the Council. While welcoming the reduction of GST on electric vehicles, the Society of Manufacturers of Electric Vehicles (SMEV) said it is in line with the government’s steps to promote eco-friendly mobility.

SMEV Director General Sohinder Gill said that the gap between prices of EVs and internal combustion engine vehicles will also be reduced with the reduction in GST. “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. The government has also been urging states to promote eco-friendly vehicles in an effort to curb rampant pollution afflicting most of the major cities.