In a recent verdict, the GST Fitment Committee including the state as well as the central revenue officers said 'no' to the request made by the EV industry to remove 18% GST on charging services across public stations. Such contracts were driven by the aspects that the industry offered both the sale of electricity and access to the related services, namely charging facilities.
Electricity supply as per notification number 2/2017-CTR is GST exempted and transmission and distribution services are also GST exempted as per notification number 12/2017-CTR; therefore, they claimed that the same shall apply to EV charging services. However the Karnataka Authority for Advance Ruling (AAR) held that charging of EV batteries at public places comes under 'supply of service', hence making the entire process applicable for 18% GST.
The Karnataka AAR further added that while charging of electric vehicles involves the supply of electricity it involves relevant obligatory services that warrant full excise of GST. The Ministry of Power at one point stated that EV battery charging is a service and not the sale of electricity as shown below, as a means of support for the decision made.
Hence, EV users will still be charged 18% GST on the whole amount at the public charging stations thus increasing the operational costs for EV owners.
This rise has only aggravated the existing debate whether to tax or not the infrastructure equipment necessary for the execution of India's EV initiatives.
CAclubindia
