It is incentives galore for electric vehicle sector in India. After the Union budget proposed measures to push for widescale adoption of electric vehicles, the high-powered GST Council on Saturday decided to reduce the tax rate on electric vehicles (EVs) to 5 per cent from the existing 12 per cent, effective from August 1.
It also slashed the Goods and Services Tax (GST) on EV chargers from 18 per cent to 5 per cent, an official statement said after the 36th meeting of the council. The meeting, chaired by Finance Minister Nirmala Sitharaman, was held via video conferencing.
The council also approved GST exemption for hiring of electric buses by local authorities.
The Union budget presented by Sitharaman also had proposed some important measures to promote adoption of electric vehicles in the country. It had proposed income tax deduction of Rs 1.5 lakh on interest paid for buyers taking loans to buy electric vehicles.
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It had also set aside Rs 10,000 crore for Phase II of the FAME (Faster Adoption & Manufacture of Electric Vehicles) scheme. The amount will be utilised to give away subsidies to electric vehicle manufacturers as also for establishing the necessary infrastructure. In addition, Sitharaman also announced launching of a 'Make in India' scheme, replete with tax exemptions, to invite global companies to set up mega manufacturing plants in EV ancillaries in India.
