Big News! GST on electric vehicles, chargers reduced to 5% : Hyundai Kona to get cheaper

In the 35th GST council meeting that took place on June 21st, the council pushed to drop the GST rate on electric vehicles to 5 percent from the previous 12 percent. The proposal was finally accepted in the 36th meeting that took place today. 

By: | Updated: July 27, 2019 7:32 PM
GST on EVs reduced GST on EVs reduced

In order to push electric mobility, the GST council has reduced GST on electric vehicles from 12 percent to 5 percent. On the other hand, the GST on EV chargers that are needed to charge these eco-friendly vehicles has been reduced from 18 percent to 5 percent. The new rates will be effective starting 1st August 2019. Apart from the reduction in GST rates on electric vehicles and EV chargers, the council has exempted the hiring of electric buses by local authorities from GST. The 36th GST Council Meeting was held Via Video Conference under the chairmanship of Union Finance & Corporate Affairs Minister Nirmala Sitharaman.

The said meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Revenue Secretary Shri Ajay Bhushan Pandey and other senior officials of the Ministry of Finance. In the 35th GST council meeting that took place on June 21st, the council pushed to drop the GST rate on electric vehicles to 5 percent from the previous 12 percent. On the other hand, the GST on EV chargers was proposed to be dropped from 18 percent to 12 percent. The proposal was finally accepted in the 36th meeting that took place today. The latest step will certainly prove to be a positive step in the direction of green mobility.

Auto manufacturers have started pushing for electric mobility and are now working dedicated in this direction. The latest development comes from Hyundai India when it launched its first-ever pure electric SUV - Kona in India at a price of Rs 25.3 lakh (ex-showroom). The Kona electric saw a decent response with 120 units booked in just 10 days of its launch. With the latest announcements, the Hyundai Kona electric and other EVs currently on sale in India will get cheaper soon. Speaking of upcoming EV launches, Revolt Intellicorp is going to launch India's first smart electric bike RV 400 on 7th August at an expected price of close to Rs 1 lakh.

Quotes from EV makers on GST revision on electric vehicles:

Speaking on GST council's latest announcement, S S Kim, MD & CEO, Hyundai Motor India Ltd. said that Hyundai welcomes the GST council’s historic decision to reduce the GST on Electric Vehicles from 12% to 5% and on EV chargers from 18% to 5%. The tax benefit will help create an ecosystem that will encourage faster mass adoption of EVs in our society. With the launch of India’s first Fully Electric SUV - KONA Electric, Hyundai has already strengthened its commitment to bring ‘Clean Mobility’ Solutions to the Indian customers and the company is 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.

Rahil Ansari, Head, Audi India said that the lowering of the GST rate on electric vehicles (EV) from 12% to 5% is definitely going to give a boost to EV’s in India and we are confident that that it will motivate customers looking for both entry-level EVs as well as luxury EVs that will enter the market. We are pleased that this coincides with our plans for introducing the Audi e-tron in India by the end of this year. The government has also placed special emphasis on development of necessary charging infrastructure during the union budget announced recently which shows its seriousness towards growth of electric vehicles in India. While these are great steps for the future, short-term measures supporting the overall industry, also the luxury segment, are required by the Government. All players are struggling with declining sales which in turn is leading to production cuts and may lead to job losses, too. The draft notification on hiking registration for ICE vehicles is detrimental to the overall development. It’s high time that short term actions are being taken by the Government to help the industry overcome this phase and contribute in the long run. We need support not penalties.

Commenting on GST revision on electric vehicles, Mahesh Babu, CEO, Mahindra Electric said that we thank the GST council for quickly ratifying and implementing the tax cut on electric vehicles that was announced during the budget earlier this month. Mahindra will pass on these benefits to customers across our entire product range with immediate affect. This tax cut along with the strong FAME II policy will see the adaption rate in EV going up drastically with a boost to India’s last and first mile mobility.

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