GST Council meet: Big boost to electric vehicles, even as some states don’t back fully; key takeaways

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Updated: July 27, 2019 2:15:27 PM

The GST meet chaired by the Finance Minister Nirmala Sitharaman, which is the first after the maiden budget of Modi 2.0, was earlier postponed two times. Meanwhile, GST completed two years of its rollout this month.

subsidy on electric vehicles in indiaThe rate on charger or charging stations for EVs was also reduced from 18 per cent to 5 per cent.

In the 36th goods and services tax (GST) Council meet, the first after the budget, the tax rate on electric vehicles (EVs) was significantly cut, even as some states didn’t fully support the move. Punjab, Delhi and West Bengal were not in favour of EV rate cut proposals fully, TV news channel CNBC TV18 reported. The West Bengal finance minister proposed to look into rates for BS-VI vehicles and even suggested the GST Council take a view on BS-VI industry, CNBC TV18 also reported citing Delhi Finance Minister Manish Sisodia as saying. Issues related to the protection of revenue and VAT were also raised by Delhi, the report added. Meanwhile, the GST rate was on EVs were cut to 5 per cent from the existing 12 per cent, effective from August 1, the government said in a statement. In addition, the rate on EV chargers was brought down to 5 per cent from the existing 18 per cent in the meet.

Four key takeaways from GST Council meet:

  • The GST rate on all EVs was slashed from 12 per cent to 5 per cent.
  • The rate on charger or charging stations for EVs was also reduced from 18 per cent to 5 per cent.
  • The hiring of electric buses, with a carrying capacity of more than 12 passengers, by local authorities, was exempted from the GST.
  • These revised GST rates will be effective from 1 August 2019.

The GST meet chaired by the Finance Minister Nirmala Sitharaman, which is the first after the maiden budget of Modi 2.0, was earlier postponed two times. Meanwhile, GST completed two years of its rollout this month. It was implemented under the first term of Prime Minister Narendra Modi-led NDA government on June 30, 2017, and came into effect from July 1, 2017.

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