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Bengal Finance Minister Amit Mitra questions haste in cutting GST on EVs

Mitra instead pitched for a cut in taxes on hybrid and BS VI vehicles.

, ET Bureau|
Jul 24, 2019, 11.40 PM IST
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He said most developed countries were also measuring their steps towards transitioning to EVs very cautiously.
New Delhi: A day before a specially convened GST Council meeting considers a proposal to slash goods and services tax rate on electric vehicles, West Bengal finance minister Amit Mitra cautioned against the move, saying it could have a “disastrous” impact on automobile companies. Mitra instead pitched for a cut in taxes on hybrid and BS VI vehicles. In a letter to Union finance minister Nirmala Sitharaman, Mitra also questioned the move to hurriedly convene the GST Council meeting to take up the single issue of electric vehicles (EVs).

He said a number of tax-related issues were pending before the fitment committee much before the proposal for a review of tax on EVs was put forth, questioning the way the issue was being pushed.

The fitment committee has endorsed the proposal to cut the GST rate on EVs to 5% from 12% and the GST Council is due to take it up on Thursday. “We are being made to understand that reducing tax on EV... will trigger huge investments... I fear this argument takes a very myopic view of the industry, completely ignoring the disastrous impact which it will entail for the existing auto units and entire service sector,” Mitra said in a letter dated July 23, seen by ET.

He said most developed countries were also measuring their steps towards transitioning to EVs very cautiously, and it was evident that replacement with EVs is not a quick fix solution.

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