GST Council meets on July 25, likely to consider lowering rate on EVs
 

The Goods and Services Tax Council is going to meet on 25th July 2019 and is expected to consider the lowering of the GST rate on e-vehicles, besides other concerns.
 

The GST Council 36th meeting
 

In order to fasten the adaptation of electric vehicles (EVs) in the nation, the GST Council, in its 36th meeting which is scheduled for 25th July 2019, shall be considering lowering the tax rates on EVs. In the Union Budget 2019-20, the Central government had recommended slashing the rates of the Goods and Services Tax (GST) for EVs to 5% from 12 percent for pushing domestic manufacturing. The rate of GST for petrol and diesel cars as well as hybrid vehicles is already at the highest bracket of 28%, plus cess.
 

Nirmala Sitharaman had announced the reduction of GST on electric vehicles from 12% to 5%. She stated that the government has already moved GST council towards lowering the GST rate on electric vehicles (EV) from 12% to 5%. Moreover, to make EVs affordable for consumers, the government would provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs.
 

Besides, the government shall give an additional tax benefit of Rs 1.5 lakh on the interest paid on loans taken for the purchase of EVs.
 

The Finance Ministry had stated that the 36th meeting of the GST Council shall be held on 25th July through video conferencing. This would be the 2nd meeting of the Council which is to be directed by Nirmala Sitharaman as Finance Minister.  FM Sitharaman had chaired the 1st meeting on 21st June 2019.

Proposal of the Fitment Committee
 

The GST Council meeting is expected towards considering the proposals of the Fitment Committee on rates for electric vehicles, chargers as well as the hiring of EVs. Primarily the recommendation was to cut the rate on electric vehicles to 5% from 12% and on chargers to 5% from 18%, and on hiring to 5% from 18%.
 

It was started after the 21st June meeting that on concerns involving GST concessions on electric vehicles, chargers as well as the hiring of EVs, the Council suggested that the concern be examined in depth by the Fitment Committee and bring it before the Council at the next meeting.
 

If a resolution is taken to lower the rate of GST, this is going to be the second key booster for e-vehicles this month. The Finance Minister, in 2019 Budget had stated that to make EVs affordable towards customers, the government would offer an additional income-tax deduction of Rs 1.5 lakh on the interest paid on loans taken for their purchase.
 

Such would help four-wheeler corporations such as Hyundai, Mahindra, Tata and BMW (they all have e-vehicle models) and Maruti-Suzuki (it would set up its e-vehicle next year). 
 

From this step of the government, The Hero Electric, Revolt Intellicorp, Ather energy, Kinetic Green, Tork Motors, 22Kymco, and Log 9 materials would also be benefited besides two-wheeler corporations in the EV sector.
 

Solar/wind systems
 

The GST Council meeting is also expected to take up concerns connected to solar power generating systems as well as wind turbines.
 

On 21st June, it was held that considering the directive of the Delhi High Court, the GST Council directed that the concern related towards valuation of goods and services in a solar power generating system and wind turbine shall be placed before the next Fitment Committee. The proposals of the Fitment Committee shall be placed before the next GST Council meeting.
 

One more concern is regarding a uniform rate of GST on the lottery. Presently, 12% GST is charged on lotteries sold through State governments directly, whereas 28% tax rate is imposed on the face value of lottery tickets authorized through State governments but sold through private suppliers. 
 

Rate on lottery
 

After the last GST Council meeting, it was stated that a Group of Ministers (GoM) on lottery had submitted a report towards the Council. After discussions on the many concerns on the rate for a lottery, the Council proposed that few issues regarding taxation (rates as well as destination principle) shall require the legal view of the Attorney General. The matter is pending before the Supreme Court and the Kolkata High Court.
 

Nirmala Sitharaman as Finance Minister
 

Prime Minister Narendra Modi and his party Bharatiya Janata Party (BJP) have claimed a landslide victory in the 17th Lok Sabha 2019 elections and has won a majority of 352 seats of the 543 seats in parliament. Narendra Modi was sworn in as the Prime Minister for the 2nd term, and the allocation of ministry to the sworn-in members of the Council of Ministers showed a juggle in the ministries in the new government.
 

Nirmala Sitharaman, who served as the full-time Defence Minister of India in the Narendra Modi government from September 2017 to May 2019, has been appointed as the new finance minister in this 2 nd term of the Modi Government. The Union Finance Minister Nirmala Sitharaman held her first GST Council meeting on 21st June 2019.
 

The Finance Minister Nirmala Sitharaman had made her maiden budget of the Modi 2.0 Government in the Lok Sabha on July 5, 2019, in the Parliament. Nirmala Sitharaman unveiled her maiden Budget by highlighting the need to invest in job creation in small and medium enterprises.
 

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Author:

eStartIndia Team