GST Council to decide on tax cut on EVs this week

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The GST Council, chaired by finance minister Nirmala Sitharaman, will meet on July 25 and decide on lowering tax rates for electric vehicles, officials said. The 36th meeting of the Council, which will happen through video conferencing, is also likely to decide the valuation of goods and services in solar power generating systems and wind turbine projects for the purposes of levying GST. The Council, which has state finance ministers as members, in its meeting last month, had referred the issue relating to GST concessions on electric vehicle and chargers and hiring of e-vehicles, to an officers committee. The recommendations of the committee is likely to be placed before the Council on July 25, officials said.

To push domestic manufacturing of e-vehicles, the Centre proposed to the Council to slash GST rates to 5% from 12%. GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28% plus cess. The Council will also consider tax structure for solar power projects. The Delhi high court had in May asked the GST 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% of contract value would be treated as goods taxable at 5%, and balance 30% as services taxable at 18%. Further, the Council may also look at taxation of lotteries.

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