Govt may cut GST rates on electric vehicles, says reports

Last Updated at: Jan 15, 2021
Govt may cut GST rates on electric vehicles, says reports

With just a day left for the GST Council Meet on June 20, 2019, India may cut down the GST for electric vehicles (EV) to 5% from 12%, boosting the sector. The proposal is set to be discussed during the meet. This comes after Punjab Finance Minister requested the Union Finance Minister and GST Council Chairman to review the tax rates in the sector.

The move encourages global manufacturers to invest in India’s planned shift to electric vehicles. Interestingly, NITI Aayog has also suggested a complete transition to EVs by 2030 and has moved a cabinet note seeking the government to assign responsibilities to the concerned authorities. NITI Aayog’s roadmap proposes switch to the two and three wheelers from 2025 and all commercial vehicles by 2025.

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According to media reports, due to the sluggish growth in the economy over the past five years in FY19, Punjab has also suggested for new rates to industries like automobile, MSME, textile and real estate. It is expected that a cut in the rates would boost the slowing economy.

In May 2019, the automobile sector witnessed the steepest decline in sales of passenger vehicles in 18 years. More than half a million vehicles were lying unsold at dealerships and major manufacturers likeTata Motors, Mahindra, Maruti Suzuki have announced factory shutdowns.

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The government of a country that wishes to grow should promote businesses actively. And, MSMEs are deserve special attention as these contribute greatly to the economy. More about Udyog Aadhar Registration.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.