No exemption from GST on electric vehicle charging at public charging stations

A GST panel, comprising state and centre revenue officials known as the Fitment Committee, has upheld the decision to impose 18 per cent GST on the charging of electric vehicles (EVs) at public charging stations, rejecting calls for an exemption. 

The request from the industry centred around the dual nature of the EV charging process: access to electricity and ancillary charges for using the charging station. 

While the supply of electrical energy is exempt from GST as per notification No. 2/2017-CTR, and services related to the transmission and distribution of electricity are also exempt under notification No. 12/2017-CTR, it was argued that the same exemption should apply to EV charging services. 

However, the Karnataka Authority for Advance Ruling (AAR) recently ruled that the activity of charging batteries at public charging stations constitutes a supply of service, making the entire consideration subject to an 18% GST.

The Karnataka AAR's ruling emphasized that the service provided at EV charging stations includes more than just the supply of electricity. It involves the provision of facilities and services necessary for charging, which justifies the application of GST to the full amount charged.

The Ministry of Power had earlier clarified that charging an EV battery is a service that consumes electricity but does not constitute the sale of electricity. This distinction was a key factor in the decision to maintain the current GST rate.

As a result, EV users will continue to pay 18% GST on the total amount charged at public charging stations.