Consumers planning to buy solar panels, electric vehicles or hybrid cars may face higher costs in the upcoming Budget 2026-27, as the government reviews tax proposals amid ongoing negotiations with the International Monetary Fund (IMF).
Sources say the IMF has refused to support new tax exemptions and is instead pushing for significant increases in General Sales Tax (GST) on electric vehicles, hybrid vehicles and solar energy equipment. According to sources, the IMF has recommended raising GST on electric vehicles from 1% to 18%. The international lender has also proposed increasing the tax rate on hybrid vehicles from 8% to 18%.
In addition, GST on solar panels could rise from 10% to 18%, a move that may significantly increase costs for consumers shifting toward renewable energy solutions.