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India will continue to cut taxes on electric vehicles and clean energy

Asia / Engineering

The Indian government plans to cut tax rates on electric vehicles from 12 percent to 5 percent.

India will continue to cut taxes on electric vehicles and clean energy

The Council on the Imposition of a Consumption Tax (GST), chaired by Indian Finance Minister Nirmala Sitharaman, will meet on July 25 to decide on tax cuts for electric vehicles, officials said.

The 36th Council meeting, which will be held via videoconference, is expected to make a decision on the valuation of goods and services in solar energy storage and wind turbine production systems for the purpose of levying GST.

To stimulate domestic production of electric vehicles, the Indian government has proposed to the Council to reduce the GST rates from 12 to 5 percent. The GST rate for gasoline and diesel vehicles and hybrid vehicles is already at its highest at 28 percent of value added. The council will also consider the tax structure for solar energy projects.

The Delhi High Court in May, after receiving an industry petition, recommended that the GST Council review the tax structure. Earlier this year, the government said that for tax purposes for solar projects, 70 percent of the contract value would be treated as goods taxed at 5 percent and the remainder as services taxed at 18 percent.

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