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3d ago

GST Council Weighs Higher Tax on Premium EVs After Panel’s Push

A proposal to lift the 5% EV rate for higher-priced cars aims to keep the strongest incentive focused on mass-market adoption.

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EV Tax Reform
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Overview

  • Tax panel recommendations seen by reporters propose raising GST on EVs priced Rs 20–40 lakh to 18% and on costlier models to 28%.
  • If the 28% slab is scrapped in the broader GST overhaul, the highest-priced EVs could shift into a new luxury band near 40%, according to a senior official cited in reports.
  • The GST Council is meeting on September 3–4 to consider the changes, with any final decision and implementation timeline still pending.
  • Global brands with imported lineups—Tesla, Mercedes-Benz, BMW and BYD—would be hit hardest, though some Tata Motors and Mahindra models above Rs 20 lakh would also be affected.
  • News of the proposal pressured auto stocks, with the Nifty Auto index slipping and shares of Mahindra & Mahindra and Tata Motors declining.