The Indian government has rolled out one of the biggest tax reforms in recent years — the GST 2.0 update in September 2025. With new slabs, revised rates, and simplified categories, this reform impacts almost every industry, including the fast-growing electric vehicle (EV) sector.
For businesses and fleet operators eyeing electric trucks, the obvious question is: “Will GST 2025 make EV trucks cheaper or more expensive?” Let’s dive into the details, break down the new tax slabs, compare them with the previous ones, and see how they affect EV trucks in India.
What Was the GST Rate on EV Trucks Before 2025?
Before this reform, India followed the older GST structure of 0%, 5%, 12%, 18%, and 28%.
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Electric vehicles (EVs) enjoyed a special concessional GST rate of 5%, introduced in 2019 to promote clean mobility.
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Diesel and petrol trucks (ICE trucks) were taxed at 28% GST, as they were considered “luxury goods” under the previous structure.
This created a huge tax gap that made EV trucks far more attractive from a purchase cost perspective.
What Changed in GST 2025?
The 56th GST Council Meeting (September 2025) introduced a new structure:
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5% GST → For merit goods, including EVs.
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18% GST → Standard slab for most goods and services.
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40% GST → For demerit/luxury/sin goods (like cigarettes, pan masala, etc.).
Impact on Vehicles:
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EVs continue to enjoy the 5% concessional rate.
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Conventional trucks have moved from 28% down to 18% GST.
EV Trucks vs Diesel Trucks: Old vs New GST Comparison
| Vehicle Type | Previous GST Rate | New GST Rate (2025) | Price Impact |
|---|---|---|---|
| EV Trucks | 5% | 5% | No change — remain affordable |
| Diesel/Petrol Trucks | 28% | 18% | Prices reduced by ~10% due to lower GST |
👉 Key Insight: EV trucks didn’t get cheaper, but ICE trucks became less expensive. This narrows the price gap, though EVs still win with lower operating costs.
Example Price Comparison
Let’s take an EV truck priced at ₹25 lakh and a similar diesel truck at ₹25 lakh (ex-showroom, before GST).
Old GST System
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EV Truck Price = ₹25,00,000 + 5% GST = ₹26,25,000
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Diesel Truck Price = ₹25,00,000 + 28% GST = ₹32,00,000
New GST System (2025)
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EV Truck Price = ₹25,00,000 + 5% GST = ₹26,25,000
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Diesel Truck Price = ₹25,00,000 + 18% GST = ₹29,50,000
👉 EV trucks still cost ₹3.25 lakh less upfront but the advantage has reduced from ₹5.75 lakh earlier.
What Does This Mean for Fleet Owners?
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EV trucks remain tax-friendly: The government continues supporting EV adoption with the 5% concessional rate.
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Diesel trucks become slightly more competitive: A 10% GST reduction makes ICE trucks cheaper.
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Total Cost of Ownership (TCO) still favors EVs: Lower fuel cost, fewer maintenance needs, and FAME-II subsidies keep EV trucks a smarter choice in the long run.
Why Didn’t the Government Reduce GST on EVs Further?
Many industry experts expected GST on EVs to be cut further (possibly to 0%). However, the Council decided to maintain it at 5% because:
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The rate is already significantly lower than traditional trucks.
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EV adoption is rising steadily; incentives like FAME-II subsidies and state policies are already in place.
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A zero GST rate would have revenue implications for the government.
How Does This Affect EV Truck Manufacturers?
For EV truck makers like Tata Motors, Ashok Leyland, and Eicher, the GST 2025 reform means:
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Their EV products retain a tax edge over diesel trucks.
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Price competitiveness has narrowed, so they must highlight lifecycle savings rather than just upfront cost.
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Supply chain benefits: With simplified GST slabs, input tax credits (ITC) may flow more smoothly, reducing manufacturing costs.
Key Benefits of EV Trucks After GST 2025
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Still the lowest GST slab (5%) in the automobile industry.
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Lower operational costs compared to diesel trucks.
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Government incentives like subsidies, road tax exemptions, and priority in tenders.
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Environmental benefits align with India’s Net Zero 2070 goal.
Challenges Ahead
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Narrowing price gap: Fleet owners may reconsider diesel trucks for short-term savings.
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Charging infrastructure: EV adoption depends on expanding fast-charging networks.
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Battery costs: GST changes don’t directly impact battery imports, which remain expensive.
FAQs on GST and EV Trucks
Q1. What is the GST rate on EV trucks in 2025?
The GST rate on EV trucks remains 5% after the GST 2.0 reform.
Q2. Did EV truck prices drop after GST 2025?
No. EV truck prices remain unchanged. However, diesel truck prices dropped due to GST reduction from 28% to 18%.
Q3. Are batteries and spare parts for EV trucks also taxed at 5%?
Not always. While EVs enjoy 5%, certain components like lithium-ion batteries may attract 18% GST if sold separately.
Q4. Will the GST advantage for EV trucks reduce over time?
Yes, as diesel trucks now attract only 18% GST, the upfront price difference has reduced. However, EVs still win on running cost and subsidies.
Q5. Should I buy an EV truck now or wait?
If your routes have good charging infrastructure, buying now makes sense. Lower GST on diesel trucks may tempt some, but EVs still offer better long-term savings.
Final Thoughts
So, will GST 2025 make EV trucks cheaper or more expensive?
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Cheaper? No, the price remains the same.
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More expensive? Not directly, but diesel trucks are now less costly, which narrows EVs’ price advantage.
Still, with lower GST, running cost benefits, and government push, EV trucks remain the smarter bet for logistics companies and fleet owners planning for the long term.
The truth is simple: GST 2025 doesn’t hurt EV trucks — it just forces them to compete harder with traditional trucks.
