EV makers welcome GST rate reduction, seek similar cut for spare batteries

Representative Image

The Society of Manufacturers of Electric Vehicles (SMEV) on Saturday welcomed the reduction of GST on electric vehicles to 5 per cent, saying it is in line with the government's steps to promote eco-friendly mobility, even as it sought a similar cut in spare batteries.

SMEV Director General Sohinder Gill said with the reduction in GST, the gap between prices of EVs and internal combustion engine vehicles will also be reduced and will thus play a part in faster adoption of electric mobility.

"The government is lately showing very clear intentions of promoting EVs and GST reduction is one such measure in line with the series of actions taken by the government in the last few months," Gill said in a statement.

"We welcome the 7 per cent reduction in GST as it will reduce the gap between the EVs and the IC Engine vehicles," he added.

Gill said if FAME-II was a dampener, the GST reduction is certainly a bright spot in the national EV policy.

"The EV industry now awaits the corresponding reduction of the 18% GST in the spares batteries as it will help maintain the low running cost of EVs over their lifetime," he said.

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.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel