Finance Minister Nirmala Sitharaman on Friday announced the reduction of GST on electric vehicles from 12% to 5%. She said that the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase electric vehicles.

Finance Minister Nirmala Sitharaman has announced that government has moved GST council to lower the GST rate on electric vehicles from 12% to 5%. While presenting the Union Budget 2019, Nirmala Sitharaman said that the electric vehicles will be made affordable for consumers She said that the government will provide additional income tax deduction of 1.5 lakh rupees on the interest paid on the loans taken to purchase electric vehicles.

The Finance Minister also gave a big push to electric vehicles by saying that Rs 10,000 crore has been approved on April this year to encourage faster adoption of electric vehicles.

In her maiden speech, Nirmala said that the government is committed to encouraging the electric vehicle industry in the country. She asserted that FAME II scheme aims to encourage faster adoption of electric vehicles by the right incentives and charging infrastructure. Sitharaman said that the country must emphasize on electric vehicles.

Sitharam said that the government had approved 300 km rail projects in 2018-2019. She further added that battery and electric vehicles will get incentives. from now on, there will be one common card to travel across India.

On Thursday, Finance Minister Nirmala Sitharaman tabled Economic Survey in Parliament. As per survey, India is capable of emerging as a hub for the production of electric vehicles (EVs), in the process boosting employment generation.

Government think tank NITI Aayog’s had earlier proposed of making mandatory for all commercial cars to be electric-powered from April 2026. The proposal was criticised by the automobile lobby, which claimed the government needed to follow a practical approach towards electric mobility without needlessly disrupting the automotive industry.

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