GST Council Reduces Tax Rate on Electric Vehicles

GST Council Reduces Tax Rate on Electric Vehicles

The Goods andServices Tax (GST) Council on Saturday decided to reduce the tax rate onelectric vehicles to 5% from 12% and levy on EV chargers or charging stations to 5% from 18%,effective from August 1, 2019, as said by an official statement.

The council also has extended a GST exemption on hiring ofelectric buses by local authorities with a carrying capacity of more than 12passengers.

The meetingwas chaired by Finance Minister Nirmala Sitharaman and it was held via videoconferencing.

The central government is also taking initiative to popularize environment-friendly electric vehicles.

The government has also providedadditional income tax deduction of Rs 1.5 lakh on the interest paid on loanstaken to purchase EVs in the Union Budget 2019-20. This amounts to abenefit of around Rs 2.5 lakh over the loan period to the taxpayers who takeloans to purchase electric vehicle. The benefit is available for loans taken onor before March 31, 2023, as quoted by Nirmala Sitharamanin her Budget speech.

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