GST Council Defers Insurance Overhaul, Imposes 18% Tax on Used EVs and Smaller Cars

Posted by Admin on 2024-12-21 10:44:28 |

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GST Council Defers Insurance Overhaul, Recommends 18% Tax on Used EVs and Smaller Cars

The 49th GST Council meeting concluded today with key decisions impacting various sectors. The council deferred the proposed overhaul of the insurance sector, which was expected to bring significant changes to the Goods and Services Tax (GST) framework. This decision follows extensive discussions, with members indicating a need for further deliberation before finalizing the policy.

One of the notable outcomes of the meeting was the recommendation to impose an 18% GST on used electric vehicles (EVs), a move that could impact the growing second-hand EV market. The decision has raised concerns among dealers and buyers, who argue that the tax could slow down the adoption of electric mobility.

Additionally, the council recommended a similar 18% tax on smaller cars, including those under 1,200cc engine capacity. This move is expected to have implications on the affordability of smaller vehicles in the market, especially for the middle-class segment.

The council also discussed changes to the tax treatment of various other sectors, including real estate and hospitality, but no immediate resolutions were made on those fronts.

Finance Minister Nirmala Sitharaman emphasized that these decisions reflect the government continued effort to streamline GST operations and ensure fair taxation across industries.