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GST on electric car batteries reduced

July 23, 2018, 04:56 PM IST by Nikhil Puthran
GST on electric car batteries reduced

- GST on lithium-ion battery reduced to 18 per cent
- GST on fuel cell vehicles reduced to 12 per cent

As part of plans to encourage development of electric vehicles in the country, the GST Council, by the Indian Government, has reduced the GST rate on lithium-ion batteries for electric cars from 28 per cent to 18 per cent. This means that overall prices of the electric vehicles will be reduced, thereby making it affordable for potential buyers.

The reduction in GST will encourage manufacturers to produce lithium-ion battery packs in the country. Currently, electric vehicle manufacturers rely on imported battery packs to help with the electric mobility industry and the import duty on the lithium-ion batteries was recently increased from 10 per cent to 20 per cent during the 2018 Budget session.

Additionally, the GST on fuel cell vehicles has been reduced to 12 per cent from 28 per cent. This will additionally boost the sales for electric vehicles in the country.

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