GST Council on Saturday decided to reduce GST rate on Electrical Vehicles from existing 12 per cent to 5 per cent and on EV Chargers from 18 per cent to 5 per cent. The new GST rate will be effective from August 1, 2019. The Council has also approved an exemption from GST on the hiring of Electric Buses by local authorities.
The meeting, chaired by Finance Minister Nirmala Sitharaman, was held via video conferencing.
The move is aimed at giving a push to domestic manufacture of e-vehicles. GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 per cent plus cess.
The Delhi High Court had in May asked the Council to take a relook at the taxation structure following industry petition.
The government had earlier this year said that for the purpose of taxing solar power projects, 70 per cent of contract value would be treated as goods - taxable at 5 per cent, and balance 30 per cent as services - taxable at 18 per cent.
The solar industry has been pitching for a different ratio for splitting goods and services for levying GST.