A new topology for a three phase, three step multilevel inverter  ( MLI )  with common mode voltage  ( CMV )  elimination. The proposed MLI structure is realized with fewer switching power device compared to the conventional MLI solution for CMV elimination. Reduced number of switching power semiconductors results in a smaller amount of driver circuit, less installation space and low cost. Further, due to the elimination of CMV, the proposed MLI is free from issues like EMI and leakage current.Presented topology is compared with other topologies to prove its superiority. Simulation results are presented to confirm the capability of the proposed MLI. The power electronics device which coverts DC power to AC power at required output voltage frequency level is known as inverter. Multilevel inverter is to synthesize a near sinusoidal voltage from several levels of dc voltage.The switching sequences of IGBTs are generated using Sine Pulse Width Modulation  ( SPWM )  technique pulses with carrier displacing technique.