- Karnataka AAR declares 18% GST on EV battery charging at public stations, distinguishing it as a supply of service, not electricity or goods
- Power distribution companies now have a tax Clarity for charging infrastructure
The Karnataka Authority for Advance Ruling (AAR) has announced that charging electric vehicle batteries at public charging stations will now attract an 18% GST rate. The ruling came to light when a power distribution company sought to establish public charging stations, intending to apply a tax along with an EV charging fee. The fee comprises two components: energy charges based on units consumed and service charges.
The pivotal issue debated was whether energy charges should be categorized as a supply of goods or services. The AAR clarified that charging an EV involves converting electric energy into chemical energy, classifying electricity as a movable property and a good. However, it ruled that the activity of charging an EV does not qualify as a supply of electricity or goods but falls under the category of a service.
The AAR’s decision mandates that ‘supply of electrical energy’ and ‘service charges’ should be considered a supply of service, subject to an 18% GST rate. This ruling offers clarity for companies setting up EV charging infrastructure, enabling them to streamline their tax liabilities against input tax credits.
