GST Council Likely to Revise Tax on Used EVs and Smaller Vehicles

The GST Council will likely discuss a proposal that could raise the Goods and Services Tax (GST) on used electric vehicles (EVs) and smaller petrol and diesel cars from 12% to 18, based on a recommendation by the Fitment Committee.

GST Council to Review EV Tax

As per news reports, the GST Council is set to review a proposal that could raise the tax on used electric vehicles (EVs) and smaller petrol and diesel cars from 12% to 18% at its meeting in December 2024 in Rajasthan.

The proposal, based on likely recommendations from the Fitment Committee, suggests that the tax rate on these vehicles should be aligned with that of larger cars and SUVs, which already face an 18% GST.

Impact of Proposed GST Hike on Used Vehicle Market

The Goods and Services Tax (GST) is applied to the dealer’s margin, which is calculated as the difference between the selling price and the original purchase price or the vehicle’s depreciated value. Should this change be enacted, all used vehicles would be taxed uniformly at 18%, potentially lowering their appeal in the second-hand market.

The GST Council is expected to make its final decision on the proposal during its meeting scheduled for December 20 and December 21, 2024, in Jaisalmer, Rajasthan.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.