Goods and services tax (GST) on Electric Vehicles (EV) may reduce to 5% from 12%. The GST council which will set to take place on June 20 will take up the proposal at the meeting said a senior government official.

GST on EV may reduce to 5%

As the government is taking many initiatives towards the development of EVs in the country.

The senior government official, who knows about the development said, “There is a proposal to cut tax rates on EVs among other issues.”

If the duties are lower it helps and encourages global manufacturers to invest in India’s shift to electric vehicles to reduce the pollution levels from the country.

This has come to light when Punjab has written to the Centre to revise the tax rates.

If the government reduces GST we can expect the electric vehicles price will also reduce. Then there are more chances of people opting for electric vehicles rather than IC engine vehicles.

Like recently in Bihar, the government gave 50% tax concession to electric vehicles.

EV makers pay the GST for batteries is 18%, other components 12% and GST on EVs (sale) is 12%.

NITI Aayog proposal

As per the government’s target to electrifying the country’s vehicles by 2030, the NITI Aayog proposed that only electric vehicles should be sold in India by 2030.

It asked the road transport and highways ministry to draw a framework that will help to cut on the sales of petrol and diesel vehicles.

It proposed piloting an ehighway program with the overhead electric network for the trucks and buses to ply on select national highways.

There was also a proposal made for the manufacturing plant of 50-gigawatt-hour (GWh) batteries by 2030.

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