In an attempt to push up the sales of electric automobiles, the Indian government reduced the Goods and Services Tax (GST) on these automobiles and their chargers. The decision to lower the GST on these products was taken on Saturday, 27th July by the Indian finance minister Nirmala Sitharaman in a GST Council meeting.
This move comes even as the Indian automobile industry is facing dire straits and posting losses. Following the change, the e-vehicles will now be charged five per cent GST from the 12 per cent they were charged before. Alongside the deduction of GST on e-vehicles, GST on their chargers has also been brought down to five per cent from 18 per cent.
This is the second such favourable decision taken towards upping the utilisation of e-vehicles by the Indian administration. Earlier, in the budget, Sitharaman had announced that potential buyers could claim an additional income tax deduction of $2,178 (Rs 1.5 lacs) for loans to buy e-vehicles.
These new tax rates will be enforced from Thursday, 1st August. Amitabh Kant, the chief executive of NITI (National Institute of Transforming India) Aayog spoke to Indian news reporters on the matter. He said, "We have a game plan to drive electric vehicles, particularly two and three-wheelers, public transport and manufacturing of batteries in India.
Our objective is that we should first work on about 80% of components of two and three-wheelers and buses and also push the manufacturing of batteries in India." India has set a 2030 deadline of e-vehicles forming around 30 per cent of the country's road transportation vehicular sales.