GST Council slashes tax on EVs and EV chargers

New Delhi: Close on the heels of Union Budget providing tax relief for buying electric vehicles (EVs), the GST Council in its 36th meeting on Saturday cut the tax on electric vehicles from 12 per cent to 5 per cent effective from August 1.

The Council has also slashed rate for EV chargers from 18 per cent to 5 per cent making electric vehicle affordable for the buyers.

The twin rate cuts are set to further boost EV sector. The Budget on July 5 had proposed Income Tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase electric vehicles.

This is a major push to the electric vehicles segment which has so far seen very lukewarm response due to high ownership cost and insufficient infrastructure in the country.

Not surprisingly, the share of electric vehicles out of total annual vehicle sales in the country is less than 1 per cent.

However, the Modi government is committed to transform the transport sector by promoting the use of green cars and bikes.

The government's think-tank Niti Aayog has put forward plan to shift to e-mobility for two-wheelers (below 150 cc) and three wheelers by 2025.