Electric Vehicle makers welcome tax breaks |
The high-powered GST Council on Saturday decided to reduce the tax rate on electric vehicles (EVs) to 5 per cent from the existing 12 per cent, effective from August 1. The Society of Manufacturers of Electric Vehicles (SMEV) on Saturday welcomed the reduction of GST on electric vehicles to 5 per cent, saying it is in line with the government`s steps to promote eco-friendly mobility, even as it sought a similar cut in spare batteries. With the reduction in GST, the gap between prices of EVs and internal combustion engine vehicles will also be reduced and will thus play a part in faster adoption of electric mobility. The GST Council also slashed the Goods and Services Tax (GST) on EV chargers from 18 per cent to 5 percent. The decision of the GST Council to reduce tax on EVs and chargers reduces upfront cost of buying a vehicle by Rs 8,000-10,000. The Council also approved GST exemption for hiring of electric buses by local authorities. In the 35th GST Council meeting, held on June 21, the Council had proposed to reduce GST rate on chargers for e-vehicles to 12% from 18%.
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