Nirmala Sitharaman, the Union Finance Minister conducted the 54th GST Council Meeting on 9th of September 2024 under her chairmanship. This meeting was attended by the state finance ministers.
In the press meet held after the GST council meeting, the Revenue Secretary Sanjay Malhotra announced that a fitment committee will be set up to re-examine the GST rates for electric vehicles (EV) charging stations.
A fitment committee is a GST panel consisting of state and center revenue officials.
Currently, the charging services for EVs are taxed at 18% GST rate. It should be noted that while electricity is exempt from GST, the same thing when classified as “services” attracts 18% GST under the “Charging of Battery” category. This inconsistency in taxing leads to higher costs to charging providers, whose burdens are ultimately passed on to the end-consumers.
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Read more: GST on EV charging but No GST on Electricity? The Double Standards against EV Drivers and Companies!
Previously, the Ministry of Power rejected the call for GST exemption for EV charging stations made by several EV charging providers, clarifying that charging an EV battery is a service that consumes electricity but does not include the sale of electricity. Since the charging stations consist of supply of service, it was said that the same is to be subjected to an 18% GST.
The Revenue Secretary’s announcement of a new fitment committee for the purpose of re-examination of this GST rate is expected to be favorable to the service providers, as such a favorable decision will improve the growth of the EV sector in India.
The EV sector in India is forecasted to exponentially grow up to 50 Billion USD by 2030, as per reports from NITI Aayog and Rocky Mountain Institute ( RMI ).
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The EV market is at its beginning stages in the country, with Tata Motors, MG Motors and Mahindra dominating the top spots in the Indian EV market as of 2023.
With rising environmental concerns at play, rapid growth is expected out of this sector and positive government incentives are necessary to further that growth.
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