GST on Electric Vehicles in India 2026: Full Rate Guide

GST on electric vehicles in India is 5% in 2026, which is one of the lowest GST rates in the entire automobile sector. If you are planning to buy an EV or you sell electric cars, knowing the correct GST slab can save you from overpaying or wrong billing.

India cut the GST on electric cars from 12% to 5% back in 2019. That rate still holds in 2026. Compare this to petrol and diesel cars, where GST goes up to 28% plus cess. The difference is huge. A Rs. 15 lakh EV saves you roughly Rs. 3.45 lakh in GST compared to an equivalent petrol car under the new GST rates on cars in India.

But here is where people get confused. The 5% rate applies to the vehicle itself. EV chargers, batteries sold separately, and spare parts have different GST slabs. This guide covers every GST rate in the EV ecosystem for 2026 so you do not end up paying wrong tax.

What Is the GST Rate on Electric Vehicles in 2026?

The GST rate on electric vehicles in India is 5%. This applies to all battery-operated cars, two-wheelers, three-wheelers, buses, and goods vehicles where the motor runs entirely on electric power. No cess is charged on EVs, unlike petrol/diesel vehicles.

The HSN code for electric passenger vehicles is 8703. Under this code, EVs fall in the 5% slab. When you check your invoice from an EV dealer, the GST line should show 5% only 2.5% CGST + 2.5% SGST for intrastate transactions, or 5% IGST for interstate supply.

One important thing to note: hybrid vehicles do not get the 5% benefit. Only pure electric vehicles with no combustion engine qualify for the lower 5% GST rate. This is a point that confuses many buyers.

See how GST rates changed across all car categories in our detailed guide: GST on Cars in India 2026.

GST on EV Charging Stations and Batteries: The Rates That Surprise People

This is where many EV owners and businesses get caught off guard. The vehicle itself is 5% GST. But once you go beyond the vehicle, rates change significantly.

So if you buy an EV for Rs. 20 lakhs, you pay 5% GST on the vehicle. But if you install a home charger later and pay Rs. 50,000 for the service, that charger service attracts 18% GST. The GST Council has not yet harmonized EV-adjacent services at the lower 5% rate, even though industry bodies have been pushing for it.

GST on Electric Cars Above 10 Lakhs Does the Rate Change?

No. The 5% GST rate on electric vehicles applies regardless of price. Whether your EV costs Rs. 8 lakhs or Rs. 80 lakhs, the GST rate stays at 5%. There is no luxury cess on EVs the way there is on petrol and diesel cars above certain price thresholds.

This is actually a big deal if you are comparing EVs to petrol luxury cars. A petrol car priced above Rs. 10 lakhs with engine displacement over 1200cc attracts 28% GST plus 15% cess, so 43% total. The same money in an EV segment means you pay just 5%.

These numbers are approximate and based on the GST slab on cars in India for 2026. The actual invoice price depends on the ex-showroom price declared by the manufacturer. Always check the GST breakup on your dealer invoice before signing.

Want to understand why GST rates differ across vehicle categories? Read: New GST Rates 2026 and Their Impact.

Can EV Dealers and Businesses Claim ITC on Electric Vehicles?

Input Tax Credit on EVs is a common point of confusion. The answer depends on how you use the vehicle and what type of business you run.

When ITC Is Allowed

EV dealers who purchase electric vehicles for resale can claim ITC. Same for businesses that use EVs as part of their core supply of goods or services. For example, a courier company that uses electric bikes for last-mile delivery can claim ITC on those bikes, since the vehicles are directly used in their business.

When ITC Is Blocked

Section 17(5) of the CGST Act blocks ITC on motor vehicles used for personal transportation. So if a company buys an EV for employee commuting or the director's personal use, ITC is blocked. This rule applies equally to EVs and petrol cars. The 5% GST rate does not give EVs any special ITC status.

Learn more about ITC eligibility rules: Can I Claim ITC on All Purchases?.

GST Registration Rules for EV Dealers and Charging Station Operators

If you run an EV dealership, a charging station, or supply EV spare parts, GST registration requirements follow the standard turnover thresholds.

EV charging as a service is classified under SAC code 998717. If your charging station turnover crosses Rs. 20 lakhs in a financial year, GST registration is mandatory. Many standalone charging operators in Tier-2 cities still operate without GST registration because they assume it is not needed. That is a compliance risk.

Check complete GST turnover thresholds for 2026: GST Registration Turnover Limit Guide.

Ready to register your EV business for GST? Visit: GST Registration Service.

GST on Electric Two-Wheelers and Three-Wheelers India 2026

The 5% GST rate is not just for four-wheel electric cars. It covers the entire electric vehicle category.

Electric tractors are an exception. They attract 12% GST, not 5%. If you are in the agri-equipment segment and dealing with electric tractors, do not apply the 5% EV rate to them. The HSN and rate notification are different.

Understand how HSN codes work and why they matter for correct GST filing: What is HSN Code in GST?.

FAME Scheme and GST: How Subsidies Work Together

The FAME-II scheme (Faster Adoption and Manufacturing of Electric Vehicles) provides direct subsidies to EV buyers through dealers. The important GST question here is whether the subsidy amount attracts GST.

As per CBIC clarifications, the FAME subsidy is a government grant. It is not treated as additional consideration for the vehicle. So the dealer does not charge GST on the subsidy amount. GST is charged only on the final price the buyer pays after deducting the subsidy.

For example: EV price is Rs. 10 lakhs. FAME subsidy is Rs. 1.5 lakhs. The dealer deducts Rs. 1.5 lakhs at the point of sale. GST at 5% is charged on Rs. 8.5 lakhs only. This saves the buyer Rs. 7,500 in additional GST.

GST Return Filing for EV Dealers: What You Need to File

If you are a registered EV dealer, your GST compliance includes monthly or quarterly return filing depending on your turnover and composition status.

EV dealers with annual turnover above Rs. 5 crore file GSTR-1 monthly (outward supply details) and GSTR-3B monthly (tax payment). Dealers below Rs. 5 crore can opt for quarterly QRMP scheme. EV dealers who opted for the Composition Scheme pay 1% tax on turnover but cannot collect GST from customers or claim ITC.

One specific thing to watch: if you sell EVs in bulk to a corporate customer under a long-term supply contract and the corporate pays in instalments, the time of supply rules under GST determine when you need to report the sale in GSTR-1. Get this right from the start to avoid notices.

Need help with GST return filing? Our team handles it: GST Return Filing Service.

 

Frequently Asked Questions 

Q1.What is the new GST rate on electric vehicles in 2026?

The GST rate on electric vehicles in India remains 5% in 2026. This applies to all battery-operated vehicles including cars, bikes, and buses. No cess is charged on EVs. This rate has been in effect since August 2019 and has not changed since.

Q2.How much GST is on an EV vehicle purchase?

If you buy an EV worth Rs. 15 lakhs, you pay Rs. 75,000 as GST at 5%. For intrastate purchase: Rs. 37,500 CGST + Rs. 37,500 SGST. For interstate: Rs. 75,000 IGST. No cess applies on top of this, unlike petrol cars.

Q3.What is the GST rate for cars in 2026?

GST on cars in India in 2026 depends on the fuel type and engine size. Small petrol cars attract 29% (28% GST + 1% cess). Large petrol cars attract 43% (28% + 15% cess). Diesel cars above 1500cc attract 48% (28% + 20% cess). Electric vehicles attract only 5% with zero cess.

Q4.Is GST charged on EV charging?

Yes. EV charging services at public or home stations attract 18% GST. The lower 5% rate is only for the vehicle itself. Charging stations are treated as service providers under GST and charge 18% on the power supply service.

Q5.Can I claim ITC on my company's electric vehicle?

ITC on company EVs is blocked under Section 17(5) if the vehicle is for personal or employee commute use. ITC is allowed only if the EV is used for your business of supplying goods or services, like delivery operations, renting vehicles, or driving school.

Q6.What is the HSN code for electric vehicles in India?

Electric passenger cars: HSN 8703. Electric goods vehicles: HSN 8704. Electric two-wheelers: HSN 8711. Electric buses: HSN 8702. Lithium-ion batteries sold separately: HSN 8507. Always check the HSN on your invoice matches the product category.

Q7.Does GST on EVs apply on the on-road price or ex-showroom price?

GST is charged on the ex-showroom price, which is the transaction value. Road tax, registration fees, and insurance are paid separately and are outside GST. So when you calculate EV cost, remember that road tax and registration are state charges on top of the GST-inclusive price.

Q8.Do electric two-wheelers also get 5% GST?

Yes. Electric two-wheelers (scooters, bikes) also attract 5% GST under HSN 8711. Whether it is a Rs. 80,000 city scooter or a Rs. 2.5 lakh performance electric bike, the GST rate is the same: 5%.

Q9.What is the GST on second-hand electric vehicles?

For second-hand EVs sold by dealers, GST applies on the margin (selling price minus purchase price), not the full sale value. This is called the Margin Scheme. If a dealer buys an old EV for Rs. 5 lakhs and sells at Rs. 6 lakhs, GST is charged at 5% on Rs. 1 lakh only, which is Rs. 5,000.

Q10.Are electric vehicle spare parts taxed at 5% too?

No. EV spare parts do not get the 5% rate. Most EV spare parts attract 18% or 28% GST depending on the part type. The 5% rate is only for the complete electric vehicle. Batteries sold separately attract 18% GST under HSN 8507.

Q11.What is the new effective date for GST rates on cars in 2026?

The current GST rates on cars, including the 5% rate on EVs, have been in force since the GST Council decisions from 2019-2022. In 2026, no new GST slab change has been officially notified for passenger vehicles as of July 2026. However, GST 2.0 discussions are ongoing and a rate revision is possible later in the year.

Conclusion

GST on electric vehicles in India at 5% is genuinely one of the government's better policy calls. It makes the ownership cost of EVs far more predictable compared to petrol cars where tax layers add up fast. But the picture is not entirely simple.

The vehicle gets 5%. Charging, batteries sold separately, and most EV services attract 18%. ITC depends on how you use the vehicle, not just what fuel it runs on. And GST registration requirements for EV charging stations catch a lot of small operators off guard.

If you are an EV dealer, check your HSN codes and GSTR-1 entries carefully. If you are a buyer, verify the GST amount on your invoice before full payment. The correct GST on your EV purchase should be 5% flat nothing more.

For any GST compliance help, our team at gstregistration.co handles EV dealer registrations, return filing, and GST notice responses across India.