Minister Gadkari to auto industry: Move away from diesel, else pay 10 % extra GST

Union Minister of Road Transport and Highways, Nitin Gadkari, has made a compelling call to the Indian automobile industry to bid farewell to diesel sales and the production of diesel vehicles, labelling diesel as a hazardous fuel. Speaking at the 63rd annual SIAM convention, he emphasized that diesel vehicles, including gensets, could potentially face a 10% GST as a pollution tax if the industry does not pivot away from diesel fuel. However, in a tweet following his statement, he clarified that there is currently no active proposal under government consideration for such a tax.

nitin gadkari on proposed 10 % additional GST on diesel powered cars

Gadkari’s plea stems from a strong commitment to two critical objectives. First, the goal to achieve Carbon Net Zero by the year 2070, aligning with global efforts to combat climate change. Second, the urgent need to curtail air pollution levels, a critical issue in India, particularly in major cities. In pursuit of these goals, he stressed the necessity for the industry to actively adopt cleaner and greener alternative fuels.

Gadkari envisions these alternative fuels as import substitutes, cost-effective, indigenous, and, most importantly, pollution-free. He drew attention to the fact that today, there are buses designed to run on petrol, LNG (liquefied natural gas), and bio-fuel, making a powerful case for the industry to wholeheartedly embrace these cleaner alternatives and phase out diesel.

While the call to shift away from diesel primarily affects the commercial vehicle sector, its impact could also reverberate through the passenger vehicle segment. This shift represents a substantial transition for an industry that has long relied on diesel-powered vehicles, especially in the commercial transport sector.

Gadkari’s clarifying tweet indicates that the government is actively considering measures to reduce the environmental impact of diesel, but no concrete tax proposal has been formulated as of now. Nevertheless, his message underscores the government’s intent to prioritize environmental sustainability and push the industry towards adopting greener, cleaner, and domestically sourced fuels.

This call for change echoes global trends where countries and industries are increasingly moving away from fossil fuels to reduce their carbon footprint and combat climate change. As India, like many nations, faces the pressing challenges of pollution and climate change, the automobile industry plays a pivotal role in shaping a cleaner and more sustainable future.

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