Electric Vehicle Prices To Go Down As Govt Slashes GST Rates

  • Published July 27, 2019
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GST on EVs reduced from 12 per cent to 5 per cent

 

  • The GST Council has approved the government's budget proposal to slash the duty on EVs.
  • Electric vehicle chargers now attract 5 per cent GST instead of 18 per cent before. 
  • New GST rates will be applicable from August 1 onwards.
  • EVs like the long-range Kona Electric could see a price cut of up to Rs 1.5 lakh

Acting upon the government’s proposal to slash GST rates on electric vehicles in the country in order to push for faster adoption, the GST Council has cut rates on EVs in India from 12 per cent to 5 percent. The federal indirect tax body also slashed GST on electric vehicle chargers from 18 per cent to 5 per cent, in sync with the government’s plan to push the electric vehicle industry in the country. The new GST rates will be applicable from August 1.


The government in its Union Budget announcement earlier this month had proposed the said rate reductions and had said that it will continue incentivising the sector. The push for EVs in the country is to reduce dependence on fossil fueled vehicles and to make India a big manufacturing hub for such vehicles in the near future.

While the current share of EVs in India is as good as insignificant, car makers like Hyundai have already launched premium long range models in India, like the Kona Electric. Priced at Rs 25.30 lakh (ex-showroom), the Kona Electric isn’t what you can call affordable and that is among the primary challenges for the faster adoption of EVs in India. However, with the lower GST rates in place now, the prices of the Kona EV can go down by as much as Rs 1.5 lakh!

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The government’s move to slash GST on EVs is a step in the right direction as the country is set to witness an influx of EVs. The Hyundai Kona will soon be joined by another long-range EV from British carmaker MG, which will launch the eZS later this year. In addition, manufacturers like Audi will bring in the e-tron this year as well. EV pioneers like Tesla are also waiting on the sidelines to enter India next year. The government’s intent and incentives coupled with infrastructure development could help provide the much needed push to the country's EV industry.

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