GST Council to decide tax cut on electric vehicles on July 25

IN a bid to fasten the adaptation of electric vehicles (EVs) in the country, the GST Council, in its 36th meeting scheduled for July 25, will consider lowering tax rates on EVs.

Published: 22nd July 2019 03:15 AM  |   Last Updated: 22nd July 2019 10:16 AM   |  A+A-

automobiles, electric vehicles, diesel vehicles
By Express News Service

In a bid to fasten the adaptation of electric vehicles (EVs) in the country, the GST Council, in its 36th meeting scheduled for July 25, will consider lowering tax rates on EVs. The Central government, in the Union Budget 2019-20, had proposed to slash Goods and Services Tax (GST) rates for EVs to 5 per cent from 12 per cent to push domestic manufacturing.

The GST rate for petrol and diesel cars, and hybrid vehicles are already at the highest bracket of 28 per cent, plus cess. While the auto lobbying body, Society of Indian Automobile Manufacturers (SIAM) has been pushing for a tax cut on conventional vehicles to revive demand in the market, the government has asked it to focus on future mobility.

The meeting of the GST Council, to be chaired by Union Finance Minister Nirmala Sitharaman, will take place through video-conferencing. The meeting is also likely to decide the valuation of goods and services in solar power generating systems and wind turbine projects for the purposes of levying tax.
According to officials, the GST Council, in its previous meetings, had referred the issue relating to the GST concessions on electric vehicles, electric chargers and hiring of electric vehicles, to an officers’ committee. The recommendations of the committee is likely to be placed before the GST Council on July 25.

The council will also consider tax structure for solar power projects. The Delhi High Court had earlier asked the council to take a re-look at the taxation structure, following petitions from the industry. 
The government had earlier this year said that for the purpose of taxing solar power projects, 70 per cent of the contract value would be treated as goods taxable at 5 per cent, and balance 30 per cent as services taxable at 18 per cent.

The solar power industry has been pitching for a different ratio for splitting goods and services for levying GST. 

Further, the council may also look at taxation of lotteries. In the previous meetings, it had decided to seek a legal opinion of the Attorney General for levying GST on lottery. Currently, a state government-organised lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax.

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