Nitin Gadkari Suggests GST Tax On Flex-Fuel Vehicles

The Minister of Road, Transport, And Highways, Nitin Gadkari, has once again taken to the public dias and requested the Finance Ministry to think about reducing the GST tax on vehicles that run on flex-fuels. Flex-fuels, a type of biofuel, currently attracts GST to the tune of 28 per cent, which is the same for all petrol and diesel-powered vehicles. The Minister of Road, Transport and Highways has urged the FM to bring this down to 12 per cent while addressing IFGE’s India Bio-Energy & Tech Expo. 

Gadkari has already asked the finance minister of Maharashtra to attend one of the GST council meetings and put forward this same proposal to Nirmala Sitharaman. He has also requested the Chief Minister of Uttar Pradesh, Yogi Adityanath, to consider reducing taxes on flex-fuel vehicles.

(Also Read: Nitin Gadkari Calls for Urgent Reforms Amid Rising Road Accidents)

The minister’s push towards cleaner fuels is mainly to reduce the country’s fossil fuel imports. The minister stated that India imports up to ₹22 lakh crore of fuel, which not only leads to air pollution but also economic problems. 

While the minister’s focus towards promoting the usage of cleaner-fuel-powered vehicles is in the right direction, it also has to take into consideration existing market conditions about the same. For starters, CNG-powered two-wheelers and cars are sold with 28 per cent GST. The fact that the Government levies 14 per cent GST on CNG fuel is making the affair a bit pricier. 

(Also Read: Nitin Gadkari Announces Incentives for Vehicle Scrapping)

And yet buying CNG fuels costs less than conventional petrol and diesel. While manufacturers like Maruti Suzuki and Tata Motor Company have more than a handful of CNG-powered vehicles on offer, legacy two-wheeler manufacturers like Bajaj Auto have also jumped into the occasion by launching the world’s first production CNG motorcycle with the Freedom 125. So, will the FM reduce GST on CNG-powered two-wheelers as well? When will that also come into focus? That also remains to be answered.