Union Minister for Road Transport and Highways, Nitin Gadkari, has clarified that the Indian government does not intend to impose an additional 10 per cent GST on diesel vehicles. Earlier, Gadkari’s remarks on the possibility of an extra tax on diesel engine-powered vehicles to combat pollution caused controversy. However, he later clarified that there is no such proposal being actively considered by the government.
Gadkari emphasizes that he is not against diesel fuel, but acknowledges its hazardous impacts on pollution and public health in India. In light of this, he urges the automobile industry to focus on using alternative fuels in their vehicles as a means to reduce pollution. Gadkari underscores that the government is already providing incentives for electric cars and encourages the industry to prioritize the adoption of alternative fuel technologies.
On September 12, at the annual convention of the Society of Indian Automobile Manufacturers (SIAM), Gadkari called for increased taxes on diesel vehicles to discourage their sales and minimize pollution. However, he later clarified via social media that there is no active proposal to impose an additional tax.
Currently, automobiles in India are subject to a 28 per cent GST, with an additional cess ranging from one to 22 per cent, depending on the vehicle type. Utility vehicles, such as SUVs and MPVs, attract the highest GST rate of 28 per cent, along with a compensation cess of 22 per cent, resulting in a total tax incidence of 50 per cent.
In conclusion, while there was initial speculation regarding an additional tax on diesel vehicles, Union Minister Gadkari has clarified that there is no such plan under consideration by the government. However, he urges the automotive industry to prioritize alternative fuel technologies to address the problem of pollution caused by diesel vehicles.
Sources:
– PTI via HT Auto Desk
– Nitin Gadkari’s tweet on September 12, 2023