GST Reduction: Expectations and Reactions of auto industry - Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) | ET Autolytics

GST Reduction: Expectations and Reactions of auto industry

With the much-anticipated tax reduction proposal, GST Council decided to cut down GST on electric vehicles (EVs) to 5 per cent from 12 per cent. The new rates will be effective from August 1, 2019. The Council also slashed the GST on EV Chargers from 18 per cent to 5 per cent.

The announcements on Electric Vehicles (EVs) in the union budget 2019-2020 bring cheers to both consumers as well as e-vehicle manufacturers. Provision of additional income tax deduction of an amount up to Rs 1.5 Lakh on purchase of EVs would encourage customers to opt for EVs.

There's too much investment required not only in infrastructure but in promoting inclusive growth. The government cannot cut back on its revenue and thus cuts back on all its social programmes — that's not correct; I don't support it at all.

A GST reduction should be implemented closer to the launch of vehicles compliant with BS-VI emission norms —effective April next year — because they would be more expensive and a tax cut would soften prices for consumers.

We welcome the GST council’s historic decision to reduce the GST on Electric Vehicles from 12 percent to 5 percent and on EV chargers from 18 percent to 5 percent. The tax benefit will help create an ecosystem that will encourage faster mass adoption of EVs in our society.

The worst thing that can happen is giving an indication that there may be a GST reduction and then wait.

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