GST Council Slashes Tax on Electric Vehicles to 5%

India has cut the GST rate on electric vehicles to 5% from 12% as part of government’s big push to cut dependence on fossil fuels and encourage eco-friendly mobility solutions.

The GST Council, the apex decision making body for the tax, also decided to slash the tax rates on electric vehicles’ battery chargers to 5% from 18%.

The new tax rates will be effective from August 1.

Punjab and West Bengal were not in favour of the move and questioned the urgency to push the proposal.

West Bengal Finance Minister Amit Mitra, according to an official, pointed to an increase in consumption of coal generated electricity for charging of EVs that would harm the environment. He had written a letter to the GST Council chairman, Union Finance Minister Nirmala Sitharaman, on July 23, seeking tax cuts on other automobiles in the wake of a demand slump in the sector.

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