New Delhi: In a move to encourage domestic manufacturing of e-vehicles, the Goods and Services Tax  (GST) Council is likely to decide on lowering tax rates for electric vehicles soon. Besides, the Council will decide the valuation of goods and services in solar power generating systems and wind turbine projects for levying the GST. The decision will come on its July 25 meeting.

Confirming the development, a source in the Finance Ministry said, "The GST Council will take two important decisions this week; the Council may cut tax rates for electric vehicles and evaluate the GST rates on solar power generating systems and wind turbine projects."

The 36th meeting of the Council, to be chaired by Finance Minister Nirmala Sitharaman, would be conducted through video conferencing with State Finance Ministers.

The Council had, in its June meeting, referred the issue relating to the GST concessions on electric vehicle, electric chargers and hiring of electric vehicles, to an officers' panel. "The recommendations of the officers panel is likely to be placed before the Council on July 25," the source said.

For electric vehicles' promotion, the government has already proposed to the Council to slash GST rates to 5 per cent from 12 per cent. The GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 per cent plus cess.

The Council will also consider tax structure for solar power projects. The Delhi High Court had in May asked the Council to take a re-look at the taxation structure following industry petition.

The government had earlier this year said that for the purpose of taxing solar power projects, 70 per cent of contract value would be treated as goods—taxable at 5 per cent—and the balance 30 per cent as services—taxable at 18 per cent.

The solar industry has been pitching for a different ratio for splitting goods and services for levying GST. Further, the Council may also look at taxation of lotteries.

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