Starting an EV charging station? Here is the GST rate and SAC code

Electric vehicle charging is growing fast, and anyone setting up a charging point soon asks: what GST do I charge, and what code do I use? Many assume it is a sale of electricity, which is tax-free. It is not treated that way. Here is the clear answer.

Running a charging station: 18% GST as a service

When you charge customers to charge their vehicles, GST treats this as a service, not a sale of electricity. This was settled by an advance ruling in Karnataka, in line with Ministry of Power guidance that a charging station provides a charging service.

1. Code: SAC 998714.
2. Rate: 18% GST on the full amount you bill the customer, including both the energy part and any service fee.
3. Input tax credit: Available. You can set off the GST you pay on your equipment and other costs against the GST you collect.

Selling chargers or charging equipment: 5% GST as goods

If your business sells EV chargers or charging-station equipment as products, that is a sale of goods.

1. Code: HSN 8504.
2. Rate: 5% GST.

If you do both

Many businesses both sell equipment and run charging points. In that case, register both codes and bill each activity at its own rate. Keeping them separate in your accounts avoids confusion at return time.

A helpful side effect

Because you collect 18% on charging but pay only 5% on the charger hardware, the credit from your equipment purchase reduces the GST you actually pay out on your charging income.

Setting up an EV charging business? Get a quote and we will handle your GST registration and set up your billing correctly from day one.

Related reading on our site: our GST registration guide.

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