New Delhi- In a stern message to the Indian automotive industry, Union Transport Minister Nitin Gadkari issued a strong caution today, indicating that the government could resort to a significant tax hike on diesel vehicles, making their sales a formidable challenge if manufacturers fail to curtail their production.
Addressing the 63rd Annual SIAM convention in New Delhi, Mr. Gadkari stated, “It’s time to bid adieu to diesel. I implore manufacturers to cease their production, or else we will implement such substantial tax increases that the sale of diesel-powered cars would become an arduous task.”
Initial reports hinted at a possible tax hike of up to 10%, but the minister swiftly clarified that there was no specific proposal currently under consideration for such a hike.
He further stated, “It is imperative to dispel the speculation surrounding an additional 10% GST on diesel vehicle sales. Let me emphasize that no such proposal is presently under active government deliberation. Our commitment to achieving Carbon Net Zero by 2070, reducing pollution caused by hazardous fuels like diesel, and accommodating the burgeoning automobile market necessitates the adoption of cleaner, greener, and domestically produced alternative fuels that are cost-effective and pollution-free.”
Presently, automobiles are subject to a 28% GST along with an additional cess ranging from 1% to 22%, depending on the type of vehicle. SUVs bear the highest tax burden, with a 28% GST rate coupled with a 22% cess.
Labeling diesel as a “hazardous fuel,” Mr. Gadkari drew attention to India’s growing dependence on fuel imports due to rising demand. He noted a significant decline in the proportion of diesel cars on Indian roads, which plummeted from 53% in 2014 to a mere 18% today, marking a positive trend.
The minister urged automakers to pivot their manufacturing strategies toward environmentally friendly fuels such as ethanol and green hydrogen. Such a shift could pave the way for increased adoption of electric vehicles in India.
Carmakers like Maruti Suzuki and Honda have already ceased the production of diesel passenger vehicles.
Source PTI
