Indian Government cuts GST on battery packs

Indian Government cuts GST on battery packs

Indian Government cuts GST on battery packs.

The Indian Government has slashed GST rates on lithium-ion battery packs from 18 percent to five percent, marking a uniform GST rate of 5 percent across the EV industry.

This is expected to reduce the prices of electric vehicles in India, as 50 percent of the cost component of EVs is the battery.

This is the second time the Indian Government has slashed GST rates on batteries. In 2018, the Government brought down the GST to 18 percent from 28 percent.

The Indian EV market has heated up in the past couple of years, with an increasing number of manufacturers setting up shops across the country.

Many new startups in the recent past have also made a debut in the market, and many have an all-electric product portfolio. 

Indian Government cuts GST on battery packs

Indian Government cuts GST on battery packs

Government slashes GST rates on EVs.

“Electric vehicles, whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5 percent,” the Finance Ministry read.

The decision was taken during the 47th meeting of the GST Council and was held in Chandigarh on June 28th and 29th. Finance Minister Nirmala Sitharaman chaired the meeting.

This comes as a significant power up to the EV industry in India.

The growing industry was looking for government intervention to promote EV adoption in real life.

Akshit Bansal, CEO of electric vehicle (EV) charging network provider, Static, in an interview with IANS, said, “This move will encourage the industry to pass on more cost benefits to the users and also lend a necessary push to people who are still looking for incentives to adapt to the EV way-of-life.”

In December last year, NITI Aayog CEO Amitabh Kant said the Government was working on reducing the rates on EV batteries.


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