Question 1

What is the GST on electric vehicle purchases in India?

Accepted Answer

5%, no compensation cess, for electrically operated vehicles including two- and three-wheelers — S. No. 441, Schedule I, Notification No. 9/2025-Central Tax (Rate), in force from 22 September 2025. Chargers sit at 5% too.

Question 2

Can a company claim input tax credit on an electric car?

Accepted Answer

Only if it escapes section 17(5)(a): vehicles carrying 13 people or fewer are blocked unless used for further supply, passenger transport or driver training. A cargo van or a 13-plus-seat bus is not in the bar.

Question 3

Is GST on EV charging 18%, or is charging exempt?

Accepted Answer

Electricity as a good is exempt, but a charging session is generally invoiced as a taxable service: no rate entry covers EV charging, and a charging station is not treated as distributing electricity. Most CPO invoices show 18%; an exempt one leaves a fleet nothing to claim.

Question 4

Does leasing an EV give better GST treatment than buying?

Accepted Answer

No — the same blocked-credit test applies to lease rentals under section 17(5)(b)(i). Where credit is blocked, leasing is usually worse: 5% across a rental stream exceeds 5% once on the purchase price. Where credit is available, the difference is timing, not amount.

Input tax credit

GST On Electric Vehicle Fleets: Input Tax Credit And The Leasing Trap

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