Electric Cars To Attract Lower GST; EV Buyers To Get Rs 1.5 Lakh Tax Benefit
Pro Tip: Despite the measures taken by the government, the EV tech will continue to remain out of reach of common buyers, at least for the moment.
The government has moved GST Council to reduce GST on electric cars from 12 percent to 5 percent. The move is aimed to make electric cars relatively affordable to own. A difference of 7 percent in GST would take the cost of a Rs 11 lakh electric car down by around Rs 70,000. There are two electric cars already on sale in India around the Rs 11 lakh mark, the Mahindra eVerito and the Tata Tigor EV. Prices of these cars should now come down a little.
Moreover, electric car buyers will now be able to get additional income tax deduction of Rs 1.5 lakh on interest paid on loans to purchase electric vehicles.
Initiatives to reduce the manufacturing cost of EVs include promotion of factories manufacturing Li-ion batteries. For reference, a battery is the most expensive component of an electric car.
It remains to be seen how much time does it take to actually make electric cars affordable because despite the various measures taken by the government, EVs will continue to remain out of reach of common buyers, at least for the moment.