Gadkari asks to reduce GST on flex-fuel vehicles to 12%

03 Sep 2024 CW Team

He mentioned that support is needed from the finance ministers of various states and added that the Union Finance Minister had assured him they would work to persuade all the state finance ministers. He noted that he had requested Maharashtra's Finance Minister to attend the GST Council meeting and propose the reduction of GST on flex-fuel engine cars and scooters.

Flex-fuel-compatible vehicles can operate on more than one type of fuel, typically a blend of petrol and ethanol or methanol. Gadkari also shared that he had asked Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes on flex-fuel vehicles.

In a separate meeting with Maharashtra Finance Minister Ajit Pawar, Gadkari suggested that Pawar attend a GST meeting with Union Finance Minister Nirmala Sitharaman to discuss the matter. Currently, vehicles powered by internal combustion engines, including hybrids, are subject to a 28% GST, while electric vehicles are taxed at 5%.

Gadkari pointed out that India imports fossil fuels worth up to Rs 22 trillion annually, which poses not only an air pollution challenge but also an economic issue. He expressed confidence that reducing fossil fuel imports and promoting biofuel would significantly benefit the agriculture sector. Gadkari also mentioned that the cost of biofuel in India is lower and produces no pollution, which would be advantageous for the general public.

The minister highlighted the importance of the automobile industry to the Indian economy, noting that it currently generates 4.5 crore jobs and contributes the highest GST revenue to both state and central governments. He also stated that two-wheeler manufacturers like Hero and Bajaj export 50% of the bikes they produce in India, and if better technology for biofuels is developed, exports could increase by an additional 10 to 20%, as pollution is a major concern worldwide.

Regarding the road sector, Gadkari noted that India is continuing to expand the length of its National Highways.

Union Minister Nitin Gadkari suggested on Monday that state finance ministers should consider reducing the Goods and Services Tax (GST) on flex-fuel vehicles to 12% during the GST Council meeting. While addressing the India Bio-Energy & Tech Expo organized by IFGE, Gadkari emphasized the importance of reducing fossil fuel imports and promoting the use of biofuels. He mentioned that support is needed from the finance ministers of various states and added that the Union Finance Minister had assured him they would work to persuade all the state finance ministers. He noted that he had requested Maharashtra's Finance Minister to attend the GST Council meeting and propose the reduction of GST on flex-fuel engine cars and scooters. Flex-fuel-compatible vehicles can operate on more than one type of fuel, typically a blend of petrol and ethanol or methanol. Gadkari also shared that he had asked Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes on flex-fuel vehicles. In a separate meeting with Maharashtra Finance Minister Ajit Pawar, Gadkari suggested that Pawar attend a GST meeting with Union Finance Minister Nirmala Sitharaman to discuss the matter. Currently, vehicles powered by internal combustion engines, including hybrids, are subject to a 28% GST, while electric vehicles are taxed at 5%. Gadkari pointed out that India imports fossil fuels worth up to Rs 22 trillion annually, which poses not only an air pollution challenge but also an economic issue. He expressed confidence that reducing fossil fuel imports and promoting biofuel would significantly benefit the agriculture sector. Gadkari also mentioned that the cost of biofuel in India is lower and produces no pollution, which would be advantageous for the general public. The minister highlighted the importance of the automobile industry to the Indian economy, noting that it currently generates 4.5 crore jobs and contributes the highest GST revenue to both state and central governments. He also stated that two-wheeler manufacturers like Hero and Bajaj export 50% of the bikes they produce in India, and if better technology for biofuels is developed, exports could increase by an additional 10 to 20%, as pollution is a major concern worldwide. Regarding the road sector, Gadkari noted that India is continuing to expand the length of its National Highways.

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