The lowered Good and Services Tax on electric vehicles and charging stations is a bright spot after a dismal second leg of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles scheme (FAME 2).

Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles ( SMEV) said, “The Government is lately showing very clear intentions of promoting EVs and GST reduction is one such measure in line with the series of actions taken by the government in the last few months. We welcome the 7 per cent reduction in GST as it will reduce the gap between the EVs and the IC Engine vehicles. If FAME 2 was a dampener, the GST reduction is certainly a bright spot in the National EV policy.”

The FAME 2 scheme was criticised for being restrictive and favouring commercial vehicles instead of personal mobility.

The GST council on Saturday decided that the GST rate on EVs will be cut from 12 per cent to 5 per cent, the rate on charging stations is cut from 18 per cent to 5 per cent and the hiring of electric buses carrying more than 12 passengers will be exempt from GST.

These new rates are applicable from August 1.

“The EV industry now awaits the corresponding reduction of the 18 per cent GST in the spares batteries as it will help maintain the low running cost of EVs over their lifetime,” Gill said.