GST Council reduces tax rates to 5 percent on electric vehicles, chargers

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Hiring of electric buses by local authorities exempted from GST

Changes in GST rates shall be effective from 1st August, 2019

Aiming to accelerate the adoption of eco-friendly vehicles, the GST Council today decided to reduce GST rate on electric vehicles from 12 percent to 5 percent and in EV chargers from 18 percent to 5 percent from August.

The Council also made hiring of electric buses by local authorities tax free. The exemption is applicable on buses with a carrying capacity of more than 12.

The tax cut is part of the support that policy makers want to give to electric mobility and to reduce the dependence on fossil fuels for transportation. India has committed to contributing to the global efforts to cut down carbon emissions and is taking leadership on this.

Last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 (by exclusive supplier of services), to be extended from 31.07.2019 to 30.09.2019. The last date for furnishing statement containing the details of the self-assessed tax in FORM GST CMP-08 for the quarter April, 2019 to June, 2019 (by taxpayers under composition scheme), to be extended from 31.07.2019 to 31.08.2019.

Himachal CM Jai Ram Thakur welcomes move

Himachal Chief Minister Jai Ram Thakur has welcomed the decision of the GST Council to reduce GST rates on electric vehicles. He said the decisions to cut tax on EV chargers from 18 percent to 5 percent and exemption on hiring of electric buses by local authorities are also appreciable steps, which were supported by the state government.

The Chief Minister said that these are the major decisions which would go a long way in boosting e-vehicle industry in the country which was demanding reduction in GST rates for a long time. He said this move is a much needed step to encourage the adoption of EVs by the people. The decision is expected to incentivize domestic manufacturing and consumption of electric vehicles in the country leading to significant reduction in prices of EVs’. The extensive use of EVs’ will reduce dependence on fossil fuels and therefore import dependence.