Nitin Gadkari Urges State FMs To Cut GST On Flex-Fuel Vehicles To 12%

Union Minister Nitin Gadkari on Monday urged state finance ministers to consider lowering the Goods and Services Tax on flex-fuel vehicles to 12% during the upcoming GST Council meeting.

Speaking at IFGE's India Bio-Energy & Tech Expo, Gadkari emphasized on the importance of reducing fossil fuel imports and promoting the use of biofuels.

He noted the need for support from the state finance ministers and said that the Union finance minister has promised to put in efforts to persuade all finance ministers to support this initiative.

Flex-fuel vehicles, which can operate on multiple types of fuel including blends of petrol with ethanol or methanol, are seen as a key component in advancing alternative fuel usage.

The Road Transport and Highways minister said that he had also requested Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes on flex-fuel vehicles.

Gadkari said that he had held a separate meeting with Ajit Pawar, during which he suggested that the Maharashtra Finance Minister attend the GST meeting with Union Finance Minister Nirmala Sitharaman and make the proposal to reduce the GST on flex-fuel engine cars and scooters.

At present, 28% GST is levied on vehicles powered by internal combustion engines, including hybrids, and 5% on electric vehicles.

Gadkari also pointed out that every year, India imports fossil fuels of up to Rs 22 lakh crore, and it is not only a problem related to air pollution but also an economic problem.

"So, now by starting this, a day will come when we will reduce our imports and will encourage bio-fuel," he said.

And because of reducing imports of fossil fuels and encouraging biofuel, the minister said, he is confident that the most important beneficiary will be the agriculture sector.

"Today, in the biofuel sector, there is a huge potential," he said. In the Indian scenario, the cost of biofuel is less and there is no pollution. So, that will benefit the common man also.

Emphasizing the importance of the automobile industry to the Indian economy, he pointed out that the sector, which has been creating crores of jobs, is the one that adds maximum GST to the state and central government kitties.

Gadkari added that two-wheeler bike manufacturers like Hero and Bajaj export 50% of the bikes they manufacture in India.

He pointed to India's potential to increase its exports by 10–20% if there is good bio-fuel technology, "because in the whole world now, pollution is a big concern".

(With Inputs From PTI)