Government likely to reduce GST to 5 percent on Hybrid Vehicles like EVs: Nitin Gadkari

Just like electric vehicles, the government will consider reducing GST on hybrid vehicles too. The Government of India earlier reduced the GST on EVs from 12% to 5% at the 2019 Budget, said Minister of Road Transport & Highway, Nitin Gadkari at SIAM Conclave.

In July, Finance Minister Nirmala Sitharaman announced the reduction of GST on electric vehicles from 12% to 5%. She said that the government has already moved GST council to lower the GST rate on electric vehicles (EV) from 12% to 5%. Also to make EVs affordable for consumers, government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs.

Presenting the Budget for 2019-20, Finance Minister Nirmala Sitharaman said the government has already approved Rs 10,000 crore for FAME II scheme on April 1, 2019 to encourage faster adoption of electric vehicles by providing right incentives and charging infrastructure. FM also said there will be a comprehensive restructuring of National Highways Programme to ensure creation of National Highways Grid of desirable capacity.

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