Quick Summary
The GST Council's rate rationalisation exercise could soon reshape India's electric vehicle (EV) market, with a proposal to raise taxes on premium four-wheelers while retaining relief for buses. At present, all EVs enjoy a concessional GST rate of 5%, a policy aimed at boosting clean mobility. However, the Group of Ministers (GoM) on GST rate rationalisation has recommended sharp increases for high-end electric cars. According to the proposals: Four-wheeled EVs priced between Rs 20 lakh a
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FAQ :
Currently, all EVs enjoy a concessional GST rate of 5%.
The proposal suggests a GST rate of 18% for four-wheeled EVs priced between Rs 20 lakh and Rs 40 lakh, and a steep 28% for EVs costing above Rs 40 lakh.
No, electric buses will continue to benefit from the concessional 5% GST rate.
Officials explained that the current flat 5% rate disproportionately benefits affluent buyers of luxury EVs and erodes government revenues. The aim is to strike a balance between equity and fiscal prudence.
The recommendations will be taken up at the GST Council meeting scheduled for September 3-4 in New Delhi, where the final decision will be made.
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