Prevailing GST rate on electric vehicles set by the Government The government recently reduced the GST rate on electric vehicles (EVs) from 12% to 5% and 18% to 5% on electric chargers. Finance minister Nirmala Sitharaman on the 36th GST Council meeting has decided to reduce the GST rate on EVs and chargers to increase their productivity. To know more about the GST rates of electric vehicles and their effect in the automobile industry read the given article. Promoting EVs through reduced GST rates The main objective of the reduced GST rate on EVs is to promote it among the common people Because still some people are unaware of the electronic vehicles and had a misconception of their rates. That’s why the finance minister Nirmala Sitharaman has decided to slash the GST rates from 12% to 5%. This could make damage to the sales of petrol and diesel vehicles because their GST is probably high in comparison to the EVs. New project of the EVs buses is also approved by the govt. in which more than 12 passengers can be carried at a time. It could be a local authority and can provide easy transportation and less would produce less harmful gases. What are the benefits of reduced GST on EVs? In the 36th GST council meeting, the idea to cut GST on EV chargers so that everyone can afford the advanced battery and electric vehicles. The committee has also decided to make a valuation of goods and services in solar power generating systems and wind turbine projects. Faster Adoption and Manufacturing of Hybrid and Electric vehicles program which is also known as FAME is a government-owned program. Which in its second phase has provided incentives for purchasing and manufacture of electric vehicles. This affects the overall sales of EVs in the market the government has also ended the direct subsidies on personal electric vehicles. With the recent update in the GST rate on electric vehicles, the government is again going the incentives route to promote the EV sector. While reducing the tax and GST around on certain EV parts and production will surely makes easier for the EV sector to grow in India. The right infrastructure, modern efficient batteries, and charging stations are the main factors that help in achieving India’s climate goals. Making India Global and Eco-Friendly with Electric vehicles The government put an income tax deduction of Rs 1.5 lakhs on electronic vehicle’s interest rate loans. With tax benefit on EVs, it would be more efficient for the government and manufacturers to encourage the mass adoption of EVs in the society. Hyundai Motor India Ltd (HMIL) had recently launched its full-electric SUV Kona whose price is Rs 25.3 lakh. It is the first
step of the Indian government in makes India growing in the automobile sector globally by reducing the GST rates on EVs. Because offering preferred electricity rates on a lowered ​GST rate​, would probably attract the consumers and make owning EVs more affordable and will increase adoption.