In a milestone move by the government, the GST Council has cut down the GST rate on electric vehicles (EVs) to 5 percent from 12 percent. The move has come as a shot for the vehicle business which has been pushing for a tax boost to promote the sale of EVs.
The Society of Manufacturers of Electric Vehicles (SMEV) has accepted the transition to slash the GST.
The move comes when the government is making EVs affordable. In another move which could altogether adjust consumer behaviour for EVs, the govt is probably going to hike the registration charges on petrol/diesel vehicles.
Four takeaways from the GST Council meeting are:
*The GST Council reduced the tax on EVs to 5 percent from 12 percent.
*The Council additionally cut the GST on EV Chargers from 18% to 5%.
*The new rates will be viable from 1st August 2019.
*GST Council additionally approved exemption from GST on hiring of Electric Buses by local authorities.
The move is viewed as a truly necessary step to energize the acceptance of EVs by people. The EV makers had been requesting a cut in the GST rate on electric vehicles as higher cost of acquisition and lacking of infrastructure deterred people from looking at EVs.
The government is forcefully pushing the acceptance of EVs. In her maiden Budget, Nirmala Sitharaman had proposed an income tax deduction of Rs 1.5 lakhs on interest paid on loans taken for EVs.
The government think tank Niti Aayog has arranged change to e-mobility for bikes under 150 cc by 2025 and three-wheelers by 2023.
The meeting, led by Finance Minister Nirmala Sitharaman, was held by means of video conferencing.
The GST Council likewise took certain choices in regards to changes in GST law.
The last date for filing of intimation, in Form GST CMP-02, for benefiting the choice of payment of tax (by exclusive provider of services) has been extended from July 31 to September 30, the statement included.
Further, the last date for outfitting statement containing the details of the self-assessed tax in Form GST CMP-08 for the June quarter (by tax payers under composition scheme) has been stretched out to August 31. The previous due date was July 31.
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