Union Minister of Finance Nirmala Sitharaman led goods and service tax (GST) council on Friday approved reduction GST on electric vehicle chargers to 12 per cent from 18 per cent earlier. However, no relief was given to the electric vehicle manufacturers as the proposal to reduce tax on EV still remains under consideration with GST committee. The move to cut tax on EV chargers are expected to improve the sentiments for EV infrastructure and invite more players.
Atul Arya, Head, Energy System Division, Panasonic said that it is definitely a boost for industry. Charger had a higher cost, with some states trying to subsidize it. The GST cut will further reduce the net cost of charger. Chetan Maini, Founder, Sun Mobility said that companies selling off board charger can also benefit from this move. This can also help government’s push to charging and swapping infrastructure. However, the move will not have a significant impact to customers as well as EV manufacturers. Maini added that one kind of charger is used within the vehicle which is still at 18 per cent. Thus, there will not be any benefit there. Moreover, customers pay for using charging services, which again is still at 18 per cent. Therefore, there is no impact of it to customers.
Naveen Munjal, Managing Director, Hero Electric said that infrastructure is not the only thing. There are other factors that play a role. It doesn’t have much impact in two-wheelers as the current policy on two-wheeler charging of 8km reach.
The industry players are hoping for GST reduction on electric vehicle to 5 per cent from current 12 per cent. The proposal for GST rate cut on electric vehicles has been sent to fitment committee.
