According to the Karnataka Authority for Advance Ruling (AAR), the process of charging batteries for electric vehicles will be liable for an 18% Goods and Services Tax (GST).
The AAR clarified that companies can avail of input tax credits for this activity. The ruling was made in response to a case involving Chamundeswari Electricity Supply Corporation Ltd., where the question was whether battery charging qualifies as a supply of goods or services.
While this ruling might be perceived negatively by some entities setting up charging units, others see it as a positive development since input tax credit can be claimed.
If the activity were exempt from GST, the opportunity to claim the input tax credit on expenses related to setting up the charging station and supplying electricity would not be available. Experts believe that this ruling can be advantageous for industry players seeking to avail of input tax credit benefits.