GST Council meet on July 25, likely to consider lowering rate on EVs

sitharamannirmala.jpg

The Goods and Services Tax Council, which will meet on July 25,  is expected to consider lowering of the GST rate on e-vehicles, besides  other issues.

The Finance Ministry said  the 36th meeting of the GST Council  will be held on July 25 via video conferencing. This will be the second meeting of the Council to be chaired by Nirmala Sitharaman as Finance Minister. She presided over the first one on June 21.

The meeting is expected to consider the recommendations of the Fitment Committee on rates for electric vehicles, chargers and hiring of EVs. Initially the proposal was to cut the rate on electric vehicles to 5 per cent from 12 per cent and on chargers to 5 per cent from 18 per cent, and on hiring to 5 per cent from 18 per cent.

It was announced after the June 21 meeting that on issues relating to GST concessions on electric vehicles, chargers and hiring of EVs, the Council recommended that the issue be examined in detail by the Fitment Committee and brought before the Council at the next meeting.

If a decision is taken to lower the GST rate, this will be the second major booster for e-vehicles this month. The Finance Minister, in her maiden Budget on July 5, had said that to make EVs affordable to consumers, the government will provide an additional income-tax deduction of 1.5 lakh on the interest paid on loans taken for their purchase.

All this will help four-wheeler companies such as Hyundai, Mahindra, Tata and BMW (all of them have e-vehicle models) and Maruti-Suzuki (it will launch its e-vehicle next year). Besides, two-wheeler companies in the EV sector such as Hero Electric, Revolt Intellicorp, Ather Energy, Kinetic Green, Tork Motors, 22Kymco and Log 9 Materials will also benefit from the government’s move.

Solar/wind systems

The GST Council meeting is also likely to take up issues related to solar power generating systems and wind turbines.

On June 21, it was announced that in terms of the order of the Delhi High Court, the GST Council directed that the issue related to valuation of goods and services in a solar power generating system and wind turbine be placed before the next Fitment Committee. The recommendations of the Fitment Committee  will be placed before the next GST Council meeting, it was said.

Another  issue relates  to an uniform rate of GST on lottery. As of now, 12 per cent GST is being charged on lotteries sold by State governments directly, while  28 per tax rate is levied on the face value of lottery tickets authorised by State governments but sold through private distributors. States such as Kerala fear that lowering  the GST on lotteries sold by private distributors on behalf of the State government will have a negative impact such as growth of the lottery mafia.

Rate on lottery

After the last meeting, it was said that a Group of Ministers (GoM) on lottery submitted a report to the Council. After deliberations on the various issues on the rate for lottery, the Council recommended that certain issues relating to taxation (rates and destination principle) would require the legal opinion of the Attorney General. The matter is also pending before the Supreme Court and the Kolkata High Court.

Source : https://www.thehindubusinessline.com/economy/gst-council-to-decide-tax-cut-on-evs-this-week/article28627098.ece

Leave a Reply

Your email address will not be published.

Solve this and then Post Comment *

scroll to top