GST Council's Fitment Committee turns down Proposal to Reduce Tax on EV Batteries to 5%

The fitment committee of the Goods and Services Tax (GST) Council has rejected the proposal of industry to reduce tax on EV batteries from 18% to 5%. Consequently, there will be no reduction in the GST rate applied to electric vehicle batteries.

According to the reports of CNBC-TV18, the industry has proposed to reduce the tax, however, the committee has rejected the same.

According to sources, the GST Council's fitment committee, composed of revenue officials from both the central government and various states, holds the perspective that Lithium-ion batteries serve diverse purposes, including applications in cellular mobile phones, portable electronic devices, and electric vehicles. This committee recognizes the versatility of Lithium-ion batteries, which extends beyond just their use in electric vehicles, thereby influencing its stance on the matter.

The 52nd GST Council is scheduled on 7th October. The Goods and Service Tax Appellate Tribunal (GSTAT) may place significant emphasis on discussing the criteria and prerequisites for appointing its chairman and members during the upcoming council meeting. Anticipated key points for discussion include outlining the composition of the 31 GSTATs established nationwide and specifying the procedure for appointing both members and the chairman.

Read More: Constitution of State GSTATs: Finance Ministry notifies 31 benches across the Nation

The GST Council is also expected to conduct a comprehensive assessment of the advancement made in implementing changes to the State Goods and Services Tax (SGST) law by various states. Notably, in the preceding month, the GST Council approved modifications to the Central GST and Integrated GST laws.

Read More: 52nd GST Council Meeting: Council Likely to Review Progress in Implementation of States’ SGST Amendments

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