GST cut on electric vehicle sold without battery pack to 5%

EVs attract a 5 per cent GST, while lithium-ion batteries fall into the 18 per cent GST bracket, at present.

In what may bring cheer to OEMs selling electric vehicles without a battery or providing Battery as a Service (BaaS) model, the Goods & Services Tax (GST) Council has fixed the tax rate at 5 per cent.

Earlier to the announcement, there was a lack of clarity on which tax bracket would electric vehicles sold without battery fall into. At present, EVs attract a 5 per cent GST, while lithium-ion batteries fall into the 18 per cent GST bracket.

The decision was taken at the GST Council’s meeting held in Chandigarh last week, which was chaired by Finance Minister, Nirmala Sitharaman.

In 2018, the GST rate on lithium-ion batteries was slashed from 28 per cent to 18 per cent.