Reportedly in a welcome move for e-vehicles manufacturing industry in india, a decision was taken during the 36th GST Council meeting to reduce Goods and Services Tax (GST) rates on electrical vehicles (EV) from 12% to 5% from August 1, 2019 and the GST Council has also decided to cut tax on EV chargers from 18% to 5% from the same period. It is a major development as it could be the turning point for the e-vehicle industry in india, which is at a nascent stage at present.
Meanwhile with today's decision, the GST Council has met a long-pending demand put forth by the burgeoning electric vehicles industry in india. Furthermore lowering GST is likely to help EV manufacturers in cutting down production costs, which could further lead to a reduction in prices of electric vehicles. Hence the decision comes at a time when many traditional car manufacturers are lining up funds to produce e-vehicles for mass markets like india.
Moreover today's decision is also in line with the government's goal to promote EVs in india and cut down on conventional fuel-powered vehicles. Hence the government has plans to increase the share of electric vehicles in india by 2030 and the GST Council has also approved exemption in cases where local authorities hire electric buses another step to promote electric vehicles as a mode of public transport.
