Impact of GST on Electric Vehicles

Under the Goods and Service Tax (GST) scheme which is scheduled for 1st July, Electric Vehicle industry has been kept at 12 percent. Opposing this move Mr. Ayush Lohia, CEO, Lohia Auto Industries said

“Keeping the Electric Vehicle industry at 12 percent tax band can prove to be harmful for this industry. The reason being that states such as Rajasthan & Uttrakhand already have 0 percent VAT on Electric Vehicles; in such a scenario levying 12 percent GST on this industry will negatively impact sales and impose a burden on consumers and dampen demand , as the cost will go up by 12 percent”. It will also increase our product cost.

For an initial 3-4 years the government should have in fact given a short term relief. Indeed they should have given a complete waiver off on Electric vehicles as to give a sales push, consumer experience and help built a customer base.

He further added that

It will be good if under new tax system, the government at least brings down the GST slab on Electric vehicles to 0-5 percent. Moreover, in times to come the government should encourage the sales by offering subsidies etc. so that demand for these vehicles goes up significantly. Also with the applicable rates for GST customer will gain comprehensive benefit”. If GST is kept low for EVs then the government‘s tax earnings from EV industry will obviously increase as it will boost sales and increased production.

Environment friendly technologies have always been encouraged by the government and for reducing emission of green house and reducing carbon emission lower taxation on Electric vehicle was the call of the hour but it is contrary to our hopes.

Commented Mr. Ayush Lohia.