India has pledged to work for sustainability and become a net zero country by 2070. Electric Vehicles are the key to reducing carbon emissions and fostering a cleaner environment. So, it is crucial to understand the GST on electric vehicles and their impact on customers.
GST Rate on Electric Vehicles
The GST rates on EV cars and charging stations were cut in 2019 to make them more affordable for mass adoption. The HSN code for EV cars is 870240. The current GST rates are as follows:
Particulars | Current GST Rates (After Aug 2019) |
EV cars | 5% |
EV 2-wheelers and 3-wheelers | 5% |
Electronic Charging Stations | 5% |
Petrol/CNG/LPG/Diesel Vehicles | 28% |
GST on EV Products and Services
- EV Batteries: The GST on EV batteries is 5%. In 2022, it was dropped to 5% from 18%.
- Charging Infrastructure: This includes chargers, charging stations, and related equipment. Currently, the GST rate on EV charging infrastructure is 5%.
- EV spare parts and accessories: EV spare parts are covered under the general category for unlisted goods. Hence, they do not attract any special GST rates. Currently, they are taxable at 28% instead of 12% earlier.
- Maintenance & Repairs: The GST on servicing EVs is 18%, which is charged for the entire service.
- Software for EVs: The GST on electric vehicle software can range between 5%-18% depending on the type of software used.
Impact of GST on Electric Vehicle Pricing
Particulars | EV @ 12% (Old) | EV @ 5% (New) | Petrol/Diesel Car @ 28% |
Cost | 10,00,000 | 10,00,000 | 10,00,000 |
GST | 1,20,000 | 50,000 | 2,80,000 |
Total Cost | 11,20,000 | 10,50,000 | 12,80,000 |
FAQs
How much GST is on a 2-wheeler EV?
GST on Electric 2-wheelers in India is 5%.
What is the tax benefit of EVs?
The buyer of an EV can claim a deduction of interest paid for the Car loan used to buy the EV. This deduction of up to Rs. 1.5 lakhs is available u/s 80EEB of the Income Tax Act only for the old tax regime.
Does the GST rate on electric vehicles apply to personal and commercial EVs?
Yes. Whether you purchase an EV for personal or commercial use, the 5% GST rate applies to both.
