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A special committee convened a GST Council meeting recently, has decided to go ahead with the reduction of GST (Goods & Service Tax) rates on electric vehicles in the country. Electric vehicles gst rates in India will soon go down from 12 per cent to 5 per cent, sometime in the coming week.
According to ET Auto, the NDA-government has identified the importance of electric vehicles in its plans to encourage the move towards cleaner tech, while reducing the dependence on fossil fuels in India. Although certain states have voiced their concerns, the committee has approved the move to reduce gst on electric vehicles in India.
The Union Budget 2019 also announced a number of new measures to encourage the move towards electric mobility in the country. This included the addition of tax benefits and tax incentives for both the manufacturers and buyers.
As part of its plans, the government has also decided to offer additional income tax deductions up to Rs 1.5 lakh on the interest rates of loans taken to purchase Electric vehicles. Also, to further complement the measures taken towards electric mobility, the government is also pushing towards tax changes on the indirect tax side as well.
Officials also stated that the GST reductions will not be limited to just electric vehicles alone. The committee also plans to reduce the GST on electric vehicle chargers as well. Currently, the GST for EV chargers in 18 per cent, which might soon be brought down to 12 per cent; further encouraging the move towards greener mobility solutions in India.
Niti Aayog, the think tank for the electric mobility solutions in India, has already planned out a roadmap for EV in the country. According to their plans, all vehicles sold in India after 2030 will be electric vehicles. The roadmap also states that all private two and four-wheelers will go electric by 2023, while commercial vehicles will be electric from 2026.
Thoughts On Electric Vehicles GST Reduction In India
The central government is really pushing towards a greener mobility solution in the Indian market. A number of measures have been put in place by the government encouraging both, the manufacturers and customers to shift to electric vehicles in India. It will be interesting to see how automakers and buyers will react to the upcoming shift in mobility in the country, in the following months and/or years.