GST council meet on EV rates deferred
The meeting of the GST Council, convened to decide on a cut in the tax rates on electric vehicles, has been postponed as finance minister Nirmala Sitharaman was pre-occupied in Parliament, officials said.
The 36th GST Council meeting, which was to be held through video conferencing, had only one item on the agenda — to consider the Centre’s proposal to slash GST rates on e-vehicles to 5 per cent from 12 per cent.
The GST Council meeting has been postponed and the new date would be decided later, officials said, adding that Sitharaman was required to attend Parliament as the Rajya Sabha was scheduled to take up for discussion the amendments to the Insolvency and Bankruptcy Code.
Bengal finance minister Amit Mitra had on Tuesday written to Sitharaman, objecting to a hurriedly called “single agenda meeting” and said other important issues that were flagged by the states should be included in the agenda.
Mitra said that the Centre was taking a “myopic view” of the automobile industry by proposing a sharp cut in the GST rate on e-vehicles, while completely ignoring the “disastrous impact” of such a move on the existing automobile units and the entire auto service sector.
Stating that the automobile industry has invested Rs 1.7 lakh crore to upgrade technology to meet higher emission standards, Mitra cautioned that an undue haste to create the infrastructure to replace fossil-fuel vehicles with EVs would have a “disastrous impact” on the auto companies.
He pitched for a “well-thought out, calibrated and phased transition to EVs”, rather than “a sudden (policy) push” to these vehicles.
Mitra pointed out that EV rollout will trigger huge demand for electricity in the country and as power is currently produced from coal sources, a higher energy demand will in effect raise greenhouse gas emissions.
He added that support needs to be extended to the traditional industry to move towards better emission standards. “Incentives should be for better technology, higher emission standards and a steady improvement towards zero emission,” he said.