GST on Electric Vehicles (EV)

India is slowly moving towards cleaner ways of travel, and electric vehicles are an important part of this change. One key reason behind this shift is the lower GST on EVs compared to petrol and diesel vehicles. Knowing how GST applies to electric vehicles helps people understand their cost better and stay aware of government policies.

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Current GST on EV in India

At present, electric vehicles attract a 5% GST, which applies to EV cars, two-wheelers, and three-wheelers. Charging stations and charging infrastructure are also taxed at 5%. In contrast, petrol and diesel vehicles attract a much higher GST of 28%. This clear difference reflects the government’s focus on encouraging electric mobility.

EV batteries, which form a major part of the vehicle cost, are taxed at 5% GST. Earlier, they attracted 18%, but the reduction has helped lower overall ownership costs. However, EV spare parts and accessories are taxed at 28%, as they fall under general goods. Servicing and maintenance of electric vehicles attract 18% GST.

How GST on EV Affects Prices

Lower GST on EV directly reduces the upfront cost for buyers. When compared with petrol or diesel cars of the same base price, electric vehicles are cheaper due to lower tax. This makes EVs more accessible and improves value for money over time. It also supports the growth of electric taxis, delivery vehicles, and fleet operations.

Wider Impact on EV Adoption

The lower GST on EVs has made electric vehicles more popular across India. More people are buying them because they are cheaper than before. This has also pushed companies to make EVs and charging stations within the country. Even though problems like high battery prices and fewer charging points still exist, the lower tax helps people think of EVs as a good long-term option.

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Conclusion

The GST on EVs plays an important role in promoting cleaner and greener transport. Because the tax rate is low and government support is available, electric vehicles are becoming easier for people in India to choose. As more charging stations are built, these tax benefits will help shape the future of travel in the country.