Nirmala Sitharaman chaired GST Council to decide on tax cut for electric vehicles this week

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Published: July 21, 2019 6:01:47 PM

The Council, which has state finance ministers as members, in its meeting last month, had referred the issue relating to Goods and Services Tax (GST) concessions on electric vehicle, electric chargers and hiring of electric vehicles, to an officers committee.

Nirmala Sitharamanm GST Councilm tax cutm electric vehicle, economy news, electric vehicle, GST rateThe recommendations of the officers committee is likely to be placed before the Council on July 25, officials said. (Image: PTI)

The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on July 25 and decide on lowering tax rates for electric vehicles, officials said. The 36th meeting of the Council, which will happen through video conferencing, is also likely to decide the valuation of goods and services in solar power generating systems and wind turbine projects for the purposes of levying GST.

The Council, which has state finance ministers as members, in its meeting last month, had referred the issue relating to Goods and Services Tax (GST) concessions on electric vehicle, electric chargers and hiring of electric vehicles, to an officers committee. The recommendations of the officers committee is likely to be placed before the Council on July 25, officials said.

To push domestic manufacturing of e-vehicles, the Centre proposed to the Council to slash GST rates to 5 per cent from 12 per cent.
GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 per cent plus cess.

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The Council will also consider tax structure for solar power projects. The Delhi High Court had in May asked the GST council to take a relook at the taxation structure following industry petition.

The government had earlier this year said that for the purpose of taxing solar power projects, 70 per cent of contract value would be treated as goods — taxable at 5 per cent, and balance 30 per cent as services — taxable at 18 per cent.

The solar industry has been pitching for a different ratio for splitting goods and services for levying GST. Further, the Council may also look at taxation of lotteries. In the previous meeting, the Council had decided to seek legal opinion of the Attorney General for levying GST. Currently, a state-organised lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax.

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