Gadkari said he had drafted a letter and intends to meet Finance Minister Nirmala Sitharaman on Tuesday, September 12, to request the GST hike.
New Delhi: Union road transport minister Nitin Gadkari said that he will propose 10% additional Goods and Services Tax (GST) on diesel-powered vehicles to discourage automobile companies from manufacturing such vehicles running on “most polluting” fuel. Speaking at the 63rd Society of Indian Automobile Manufacturers (SIAM) Convention, the Minister for Road Transport and Highways said, “I am requesting the Finance Minister to impose an additional 10 percent GST on diesel engines/vehicles. This is the only way to phase out diesel vehicles.”
He however later issued a clarification saying that there is no such proposal currently under active consideration by the government. Taking to X, the Union Minister said, “There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government. In line with our commitments to achieve Carbon Net Zero by 2070 and to reduce air pollution levels caused by hazardous fuels like diesel, as well as the rapid growth in automobile sales, it is imperative to actively embrace cleaner and greener alternative fuels. These fuels should be import substitutes, cost-effective, indigenous, and pollution-free.”
There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government. In line with our commitments to achieve Carbon Net…
— Nitin Gadkari (@nitin_gadkari) September 12, 2023
It is to be noted that most of the commercial vehicles in the country currently run on diesel. In the passenger vehicle segment, various carmakers including Maruti Suzuki India and Honda have already stopped manufacturing diesel cars. Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market.
Terming diesel as a hazardous fuel, he noted that the country has to import the fuel to meet the demand. “After 2014, 52% of the (number of) diesel vehicles reduced to 18%. Now that the automobile industry is growing, diesel vehicles shouldn’t increase. You make decisions at your level so that diesel (vehicle) is reduced. If it wouldn’t happen, then I would recommend to the Finance Minister that diesel is creating a lot of pollution so a 10% additional tax should be levied on it,” he told the media.
#WATCH | Delhi: “After 2014, 52% of the (number of) diesel vehicles reduced to 18%. Now that the automobile industry is growing, diesel vehicles shouldn’t increase. You make decisions at your level so that diesel (vehicle) is reduced. If it wouldn’t happen, then I would recommend… pic.twitter.com/B2eoIU2Uqv
— ANI (@ANI) September 12, 2023
Automobiles are currently taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle. SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent.