Environmental Incentives: india is pushing for a transition to electric vehicles to reduce pollution and reliance on fossil fuels. To promote this, the government has kept the GST on electric vehicles (EVs) at a lower rate of 5%. This is part of a broader strategy to incentivize green technology and reduce carbon emissions.
High Taxation on Petrol/Diesel Cars: Conventional petrol and diesel cars are subject to a much higher GST rate—28%, plus additional cess depending on engine size and type. This high tax rate is designed to discourage the use of fossil fuel-powered vehicles due to their environmental impact and to compensate for the subsidies and incentives provided to the EV industry.
Encouraging EV Adoption: By taxing luxury EVs like the bmw i7 at a lower rate of 5%, the government aims to make these vehicles more attractive, even in the luxury segment. The strategy is not just to promote EVs among budget buyers but also to encourage high-end consumers to switch to cleaner vehicles.
This tax structure reflects the government's priority on reducing pollution and moving toward cleaner, more sustainable transportation.