GST Rates Reduced To 5% On EVs, EV Chargers

In a major push for electric vehicles (EVs), the GST Council on July 27 reduced Goods and Services Tax (GST) rates on all electric vehicles and charging equipment down to five per cent. The Council also decided that hiring of electric buses by local authorities would be exempt from GST. 

GST was so far being charged on electric vehicles at 12 per cent, while on EV chargers, it was 18 per cent. The new reduced rate of five per cent would be effective from August 1, a finance ministry official said.

The decisions were taken during the GST Council meeting held via video conference on Saturday. The meeting was earlier scheduled for Thursday but was later postponed to Saturday.

A government official said that reduced rate of five per cent would be applicable on both chargers as well as charging stations of electric vehicles.

Charging stations are already being installed by authorities in different locations in metro cities. On Friday, the Energy Efficiency Services Ltd (EESL) had signed a pact with the New Okhla Industrial Development Authority (NOIDA) to install nearly 100 public charging stations in the city and bolster the adoption of electric vehicles. Many such stations are being installed in Delhi as well.

“Hiring of electric buses by local authorities of carrying capacity more than 12 passengers would be exempt from GST,” the official said.

He added that notifications would be issued by the government soon to give effect to the decisions taken in the meeting.