GST Council Cuts Down GST Rate On Electric Vehicles And EV Chargers
In a move that can be hailed as exemplary, the GST Council has decided to cut down the GST rate on electric vehicles from 12% to 5%. The council also decided to reduce GST on EV Chargers from 18% to 5%. It will come in effect from August 1.
The Council also ended up exempting the hiring of electric buses by local authorities from GST.
“The 36th GST Council Meeting was held here today via video conference under the chairmanship of Union Finance & Corporate Affairs Minister Nirmala Sitharaman,” a government official said in an official release, The Hindu reported.
Union Minister of State for Finance & Corporate Affairs Anurag Thakur was one of the important attendees besides Revenue Secretary Ajay Bhushan Pandey and other senior officials of the Ministry of Finance.
SMEV Lauds The Move
The Society of manufacture of electric vehicles (SMEV) appreciated the government’s move of slashing GST on electric vehicles.
The car makers poured in their words of praise for the move. “We welcome the GST Council’s historic decision to reduce the GST on electric vehicles from 12 per cent to 5 per cent and on EV chargers from 18 per cent to 5 per cent.”
“The tax benefit will help create an ecosystem that will encourage faster mass adoption of EVs in our society,” Hyundai Motor India Ltd (HMIL) MD and CEO S S Kim said in a statement, The Hindu Business Line reported.
Mahindra & Mahindra Managing Director Pawan Goenka, had similar thoughts on the move. “One more bold enabling step by GoI (government of India) to support EV movement. With the GST rates coming down the financial viability for 3W and even 4W for shared mobility becomes positive. Now let us just do it,” he tweeted.
One more bold enabling step by GoI to support EV movement. With the GST rates coming down the financial viability for 3W and even 4W for shared mobility becomes positive. Now let us just do it.
— Pawan K Goenka (@GoenkaPk) July 27, 2019
The government has made its stand clear on the adoption of electric vehicles. Coming to the budget, Nirmala Sitharaman had proposed an income tax deduction of total of Rs. 1.5 lakhs on interest paid on loans taken for EVs.
A transition to e-mobility for two-wheelers less than 150 cc by 2025 and three-wheelers by 2023 has been planned by the government think tank Niti Aayog.
To avail the option of payment of tax (by exclusive supplier of services), the form for GST CMP-02 needs to be filled and the date for filling the same has been extended from July 31 to September 30.
Additionally, the last date for furnishing statements that consist of the details of the self-assessed tax in Form GST CMP-08 for the June quarter (by taxpayers under composition scheme) has also been extended. The deadline has been extended from July 31 to August 31.