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GST reduced from 12% to 5%, expected to be cheap from 8 thousand to 10 thousand


  • Electric vehicle charger will attract 5% GST instead of 18%
  • The new GST rates will be applicable from August 1

new Delhi. The GST Council has approved reducing the GST rate on electric vehicles from 12% to 5%. GST on electric vehicle charger has been reduced from 18% to 5%. The new rates will be applicable from 1 August. Local bodies will be exempted from GST on rent of electric bus (more than 12 passenger capacity). These decisions were taken at the 36th meeting of the GST Council held on Saturday under the chairmanship of Finance Minister Nirmala Sitharaman. According to Tarun Mehta, CEO and Founder of Ather Energy, the reduction in GST rates on electric vehicles and chargers will reduce the prices of e-vehicles by 8,000 to 10,000 rupees.

To promote e-vehicle in the country, the government had proposed to reduce GST. Electric vehicle manufacturers were also seeking to reduce GST. The government also announced in the budget that the benefit of income tax exemption will be given on paying interest of up to Rs 1.5 lakh on the loan of e-vehicles.

For pollution control and to stay ahead in the electric vehicle industry, the government wants all three wheelers in the country by 2023 and all two-wheelers by 2025 to be electric.

Now waiting for GST reduction on battery: DG Sohinder Gill of the Manufacturers Society of Manufacturers of Electric Vehicles (SMEV) says that the GST Council’s decision will reduce the price difference between electric vehicles and petrol-diesel vehicles. This will increase the adoption of electric vehicles. Gill says that if the Fame-II scheme in the country’s e-vehicle policy was disappointing, the decision to reduce GST is encouraging. Now GST on batteries is waiting to be less than 18%. This will help in keeping down the cost of operating electric vehicles forever.

Hyundai Motor India MD and CEO SS Kim has said that the reduction in GST will help in building the eco-system of electric vehicles. Electric vehicle buyers will gain confidence. Hyundai recently launched the electric SUV corner. It costs 25.3 lakh rupees.

Other decisions of GST Council

  • The deadline for opting for composition scheme was extended from 31 July to 30 September.
  • The deadline for giving information about tax for the June quarter to traders with composition schemes was extended from 31 July to 31 August.


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