Nitin Gadkari Advocates for Lower GST on Flex-Fuel Vehicles to 12%

By: Admin
Date: September 03, 2024
Categories: GST Recent News
Read Time: 4 Min

Nitin Gadkari Advocates for Lower GST on Flex-Fuel Vehicles

Union Minister Nitin Gadkari has urged state finance ministers to reduce the Goods and Services Tax (GST) on flex-fuel vehicles to 12%. He will present this proposal at the upcoming GST Council meeting. This push aligns with his broader goal of decreasing India’s reliance on fossil fuels and promoting biofuels.

Key Highlights

Advocacy for GST Reduction:

Gadkari highlighted the need for financial incentives to boost the adoption of flex-fuel vehicles. At the India Bio-Energy & Tech Expo organized by the IFGE, he discussed the issue with Maharashtra’s Finance Minister Ajit Pawar. He has also requested Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes for these vehicles.

Current GST Structure:

Currently, internal combustion engine vehicles, including hybrids, face a 28% GST. In contrast, electric vehicles are taxed at just 5%. Gadkari aims to lower the GST on flex-fuel vehicles significantly to make them more affordable and attractive to consumers.

Economic and Environmental Impact:

Gadkari pointed out the economic strain of fossil fuel imports, costing India about ₹22 lakh crore annually. He argued that reducing dependency on fossil fuels is crucial for economic stability and environmental sustainability. Additionally, he noted that increased biofuel use could benefit the agriculture sector by boosting demand for crops like sugarcane, which are used to produce ethanol.

Potential Benefits for the Auto Industry:

The automobile industry is vital to India’s economy, generating around 4.5 crore jobs and significant GST revenue. Gadkari highlighted that advancements in biofuel technology could lead to a 10-20% increase in exports, particularly in the two-wheeler segment. Companies like Hero and Bajaj already export 50% of their production.

Gadkari’s push for a GST reduction on flex-fuel vehicles is part of his strategy to promote sustainable economic growth and address environmental concerns.

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