Union Budget 2019: Electric vehicles get a major boost as govt. proposes tax benefits, GST reduction
EV buyers availing loans for their cars will now be eligible to save up to Rs 1.50 lakh on income tax.
Electric vehicle ownership in the country just received a major boost from Finance Minister Nirmala Sitharaman's Union Budget presented earlier today.
The government has instructed the GST council to reduce Goods and Service Tax (GST) on electric cars from 12 percent to 5 percent. The GST rate on raw material for EVs which includes the likes of lithium-ion batteries and electric motors though still stands at 18 percent.
As of now, most EV parts are imported which immediately forces car makers to hike up prices of EV variants and for the time being, the government plans to offer customs duty exemption on a select range of parts. Earlier this year, the government had announced a Rs 10,000 crore budget for EV adoption under the phase II of FAME scheme for three years.
To increase affordability, the GST Council is deliberating on lowering #GST on #ElectricVehicles from 12% to 5%. Additionally, Rs 1.5 lakh tax exemption will be given on the purchase of #EVs: FM #NirmalaSitharaman in her #Budget2019 speech. #BudgetForNewIndia pic.twitter.com/DlSOy0fMer
— NITI Aayog (@NITIAayog) July 5, 2019
To further push people into buying electric vehicles in the country, EV buyers availing loans for their cars will now be eligible to save up to Rs 1.50 lakh in terms of income tax, depending on their tax bracket. The government is in fact also looking to put in place a framework for a mega battery manufacturing and charging infrastructure which including the use of petrol pumps as electric charging points to further push the move to EVs in the country.
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