Additional 10% tax on diesel engine vehicles? Nitin Gadkari clarifies

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Union transport minister Nitin Gadkari on Tuesday clarified that the Centre has not proposed to impose an additional 10 percent tax on diesel engine vehicles as media reports suggested. Earlier, reports said that Gadkari would be writing a letter to the union finance minister Nirmala Sitharaman today evening proposing the additional tax in an attempt to reduce pollution.

Union transport minister Nitin Gadkari

“There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government,” Gadkari wrote on X, formerly known as Twitter.

He added, “In line with our commitments to achieve Carbon Net Zero by 2070 and to reduce air pollution levels caused by hazardous fuels like diesel, as well as the rapid growth in automobile sales, it is imperative to actively embrace cleaner and greener alternative fuels. These fuels should be import substitutes, cost-effective, indigenous, and pollution-free.”

Addressing the 63rd Annual SIAM Convention in the national capital on Tuesday, Gadkari termed diesel as a “hazardous” fuel, and noted that the country has to import the fuel to meet the demand, reported news agency PTI. He also urged the industry to focus on environment-friendly alternative fuels like ethanol or green hydrogen.

According to Gadkari, the contribution of diesel cars has already come down drastically in the country.

Earlier in May, a government panel recommended banning diesel-powered four-wheeler vehicles by 2027 and switching to electric and gas-fuelled vehicles.

“By 2030, no city buses should be added which are not electric…diesel buses for city transport should not be added from 2024 onwards,” the panel had said in a report posted on the oil ministry’s website.

Meanwhile, carmakers including Maruti Suzuki India and Honda have already stopped manufacturing diesel cars.

Notably, automobiles are currently taxed at 28 percent GST with additional cess ranging from 1 percent to 22 percent depending on the type of vehicle; while SUVs have the highest GST rate of 28 percent with a compensation cess at 22 percent.

(With inputs from PTI)

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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