Government of India slashed GST rates on EV battery pack

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The Government of India and the GST Council have decided to bring down the GST rates on lithium-ion battery packs from 18% to a mere 5%. The move comes as the government’s another attempt to enhance the EV adoption rate thereby making EV vehicles much cheaper to buy in India.

GST on EV battery packs slashed

According to the Government Of India’s new resolution, the GST on battery packs made up of lithium-ion has been slashed from 18 percent to five percent in India. The original GST rate in India for EV battery packs was 28 percent, however, the government reduced it to 18% in 2018 followed by 5% now.

As one uses EV, the battery packs constitute half of the total price tag on these vehicles. Thus, getting a GST discount will boost its sales as well as its adoption rate in India. Note that the GST discount is available for EVs with both battery packs included and exclusion thereby giving the EV market a much-needed boost.

The EV market in India has been continually growing over the years given that many manufacturers have mushroomed with their EV solutions. The number of EVs on Indian roads has increased as well and more models are joining, be it cars or bikes, or other modes of transport.

The decision was taken at the 47th meeting of the GST Council in Chandigarh and was chaired by Nirmala Sitharaman, Finance Minister. According to Akshit Bansal who is the CEO of Statiq, an EV charging network provider, the move will surely push more people to buy EVs and adapt to them.

EV cars priced slashed in Haryana

In different news regarding EVs, the Government of Haryana has decided to give a discount of 3 lakhs on EVs priced below INR 40 lakhs and as much as 15% on prices up to 70 Lakhs. Although available for the short term unlike the GST rate slash on battery packs, the incentives will effectively reduce the price tags on EVs like the Tata Nexon EV Max and Honda City Hybrid by INR 3 lakhs.

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1 Comment
1 year ago

GST 5% on lithium-ion battery applicable if we use for EV’s or for all purposes…. can you share the relevant notification.