GST Council Retains 5% Tax on All EVs, Backing India’s Clean Mobility Goals

In a boost for India’s electric vehicle journey, the GST Council has decided to keep the 5% concessional GST rate on all EVs intact, even as it rolls out the broader “GST 2.0” tax reforms. This means whether it’s an entry-level electric scooter or a high-end electric car, the tax stays the same, with no extra burden on buyers.

This decision overrides earlier recommendations from a tax panel that had suggested steep hikes on premium EVs, with proposals of 18% to 28% GST based on price brackets. By opting for continuity, the Council has sent a clear message: clean mobility remains a national priority.

The industry has welcomed the move. Automakers like Tata Motors and Mahindra viewed it as a sign of long-term stability, a critical factor for EV adoption. At the same time, some executives flagged a concern: lower taxes on smaller petrol and diesel cars could create tougher competition for EVs.

Still, keeping the flat 5% GST on EVs ensures prices remain stable for consumers and gives manufacturers more breathing room to scale up production, helping India stay on track in its transition to cleaner transport.