New Delhi, September 12: Union Minister Nitin Gadkari has announced his intention to introduce a “pollution tax” in the form of an additional 10% GST on diesel vehicles and gensets to combat air pollution effectively. Speaking at the 63rd Annual SIAM convention in New Delhi, the Union Road Transport and Highways Minister emphasized the growing health hazards posed by rising pollution levels.
Gadkari revealed that he plans to submit a letter to the Finance Minister, urging the imposition of an extra 10% GST on diesel-powered vehicles. Currently, a significant portion of commercial vehicles in India relies on diesel as their fuel source. In the passenger vehicle sector, several automakers, including Maruti Suzuki India and Honda, have already ceased the production of diesel cars.
Highlighting the decreasing relevance of diesel cars in the country, Gadkari urged manufacturers to discontinue their production and sales, citing diesel as a hazardous fuel source that requires imports to meet demand.
Gadkari warned that if the industry doesn’t transition away from diesel, the government may impose such high taxes that selling diesel cars would become extremely challenging. He also mentioned his intention to propose additional GST on diesel-powered generators.
As of now, automobiles are subject to a 28% GST, with an additional cess ranging from 1% to 22%, depending on the vehicle type. SUVs face the highest GST rate at 28%, along with a 22% compensation cess.
Gadkari encouraged the industry to shift its focus towards environment-friendly alternative fuels, such as ethanol, and urged a deeper exploration of green hydrogen as well.
