The Ministry of Heavy Industries (MHI) has supported the proposal by the Society of Indian Automobile Manufacturers (SIAM), assisting in their request for lessening a reduction in GST rate on CNG-powered two-wheelers from the existing 28 per cent to 18 per cent and then to 12 per cent in stages.
Bajaj Auto can be the key beneficiary of the move which has previously launched CNG-powered motorcycles in the market. Also, other companies like TVS are looking to enter the market.
The Ministry of Petroleum and Natural Gas (MoPNG) asked for a likewise reduction in GST for CNG-powered passenger cars, apart from endorsing a reduction in CNG two-wheelers also in their response to the proposal. On the MoPNG request for reduction of GST on CNG passenger cars in the letter, MHI does not say anything and SIAM emphasized only for the two-wheeler segment.
Read Also: GST Authorities Issue Tax Notices to CNG Cylinder Providers for Incorrectly Applying 18% GST
On January 1, 2025, the letter sent before the revenue secretary in the finance ministry cited that the proposal has the endorsement of the additional administrative ministries, which possess the Ministry of Road Transport and Highways led by Minister Nitin Gadkari, who had initially placed such a move, and Ministry of Environment, Forest and Climate Change.
MoPNG has said that it shall be asked for a reduction of GST on CNG-powered cars. It said that it has kept the proposal citing that the GST reduction for CNG two-wheelers shall assist in increasing their move in the nation, as it facilitates sales and assists in getting India closer to its carbon-neutral ambition.
MHI, the proposal on CNG two-wheelers also had the endorsement of the Automotive Research Association of India, which has cited that “CNG two-wheelers should be considered for lower GST”.
An appeal has been made by the SIAM to lessen the base duty on two-wheelers to 18% from 28%. Towards internal combustion engine (ICE) flexi fuels and ICE CNG two-wheelers, it furnished that GST to be lessened to 18% till that time when the two-wheelers pose a 28% GST.
But once the GST duty gets lessened to 18% for all two-wheelers it has been recommended that for ICE flexi fuels and CNG two-wheelers, it must be lessened to 12%.
The sales of Bajaj Auto’s CNG bike are exciting. Since its launch in July last year till December end the company has already registered as many as 38,172 CNG-powered bikes.
