Lower GST on flex fuel vehicles? Nitin Gadkari urges state finance ministers to think about it

TPS on multi-fuel vehicles: Union Minister Nitin Gadkari on Monday said state finance ministers should consider reducing the Goods and Services Tax (GST) on flexible fuel vehicles to 12 per cent at the GST Council meeting. Speaking at IFGE’s India Bio-Energy & Tech Expo, Gadkari also said there was a need to reduce imports of fossil fuels and encourage use of biofuels.

“We need the support of the finance ministers of different states. The (Union) finance minister has assured me that we will try to convince all the finance ministers. “Yesterday, I asked the Maharashtra finance minister to attend the GST Council meeting and propose reduction of GST on flex-fuel cars and scooters,” he said.

FFP vehicles can run on multiple fuels, as well as a blend. Typically, a mixture of petrol and ethanol or methanol is used. The Minister for Road Transport and Highways said he had asked Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes on FFP vehicles.

In a separate meeting with Maharashtra Finance Minister Ajit Pawar, Gadkari suggested that he attend a GST meeting with Union Finance Minister Nirmala Sitharaman on the issue.

Currently, 28% GST is levied on internal combustion engine vehicles, including hybrids, and 5% on electric vehicles. Gadkari also pointed out that every year, India imports fossil fuels to the tune of Rs 22 lakh crore, and it is not just an air pollution problem but also an economic problem.

“Starting now, a day will come when we will reduce our imports and encourage biofuels,” he said. And through the reduction of fossil fuel imports and the encouragement of biofuels, he added, the minister is confident that the main beneficiary will be the agricultural sector.

“Today, the biofuel sector has huge potential,” he said. According to Gadkari, in the Indian scenario, the cost of biofuels is less and there is no pollution, which will also benefit the average citizen.

The minister stressed that the automobile industry is an important industry for the Indian economy. “This industry, which is in existence so far, creates 4.5 million jobs. It is the industry which pays the maximum GST to the state and central governments,” he stressed.

Gadkari also said that two-wheeler manufacturers like Hero and Bajaj export 50 per cent of the bikes they manufacture in India. “If we can have good technology for biofuels, our exports will increase by 10-20 per cent more because worldwide, pollution is now a major concern,” he said.

The minister said that as far as the road sector is concerned, India is increasing the length of national highways.