Chennai: In a crucial move, the GST Council has reduced the GST on electric vehicles (EVs) from 12 per cent to 5 per cent.
The Council also brought down the GST on EV Chargers from 18% to 5%. The new rates will be effective from 1 August 2019.
GST Council also approved exemption from GST on hiring of Electric Buses by local authorities.
The government had already announced several sops for the EV sector including Income Tax exemption and reduction in customs duties for certain components in the Union Budget.
While the Modi government wants to encourage domestic manufacturing of e-vehicles, Nirmala had also said in her Budget speech that the government wants to develop India as a manufacturing hub for electric vehicles and want to encourage their purchase.
According to FICCI, rationalisation of GST rates for electric vehicles will provide a big boost to the sector.