Nitin Gadkari, the Minister for Road Transport & Highways, has declined reports suggesting his intention to introduce an extra 10% GST on diesel vehicle purchases, through a post on the social media platform X (formerly known as Twitter).
The necessity for clarification arises due to false media reports indicating an additional 10% GST increase on diesel vehicle sales. Nitin Gadkari, in a statement on the social media platform X, wrote that currently, such a proposal is not in consideration before the government.
To fulfil our obligations of reaching Carbon Net Zero by 2070 mitigating air pollution caused by harmful fuels such as diesel, and considering the significant expansion of the automotive industry, it is crucial to completely adopt cleaner and more environment-friendly alternative fuels. These fuels should be domestically sourced, cost-efficient, and should be pollution-free.
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Earlier reports indicated that the minister was prepared to suggest an additional 10% GST (Goods and Services Tax) on the acquisition of diesel cars within India. Gadkari also allegedly warned automobile manufacturers about potential additional taxes if they persist in selling highly polluting vehicles.
Gadkari was quoted by the news agency Reuters as saying, bid farewell to diesel down the line, or else we will impose such additional taxes that selling these vehicles will become challenging… soon we must transition away from petrol and diesel and embark on a new journey towards a pollution-free environment.
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As per media accounts, Gadkari made these statements at an automotive conference in New Delhi, attended by executives from automaker companies like Tata Motors, Mahindra, and Mahindra, Maruti Suzuki. The conference was also attended by foreign automakers like Mercedes and Volkswagen.
According to these reports, Gadkari indicated his intention to request Finance Minister Nirmala Sitharaman for a “further 10%” GST (Goods and Services Tax) on diesel vehicles due to their contribution to heightened pollution levels.
Gadkari also pointed out that the production of diesel cars has significantly decreased since 2014 when they constituted 52 percent of the total production, and currently, they represent only 18 percent.
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Currently, the government applies a 28% tax rate to diesel cars, along with an extra levy known as a “cess,” which may depend on the engine capacity of the vehicles. Following the emergence of these media reports, the stock prices of prominent automobile companies experienced a significant decline.
