GST Council cuts rates on e-vehicles to 5% from 12%

GST Council cuts rates on e-vehicles to 5% from 12%

File Photo for representation

In a crucial meeting Saturday, the GST Council decided to cut tax on electrical vehicles from 12% to 5% effective from August 1, even as a few states, including Punjab, expressed concerns on a potential revenue loss.

The GST on electric vehicle chargers too would be reduced from 18% to 5% from August 1.

In the Union Budget for 2019-20, Finance Minister Nirmala Sitharaman had announced a custom duty reduction on certain parts of electric vehicles in order to incentivise electric vehicle mobility.

She had also announced that the government had moved a proposal to the GST council to lower the GST rate on electric vehicles from 12% to 5%.

Also, to make electronic vehicles affordable for consumers our government would provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs.

GST Council also approved an exemption on hiring electric buses by local authorities.