Want additional 10% GST on diesel vehicles as they 'create a lot of pollution': Nitin Gadkari

Diesel vehicles in India are expected to get costlier soon as Union Road Transport Minister Nitin Gadkari Tuesday said he will propose 10 per cent additional Goods and Services Tax (GST) on them.

Justifying his decision to make such a proposal, Gadkari said: "Diesel is creating a lot of pollution," and the move will discourage automobile companies from manufacturing them.

Speaking at the 63rd Society of Indian Automobile Manufacturers (SIAM) Convention, Gadkari said he has kept a letter ready, which he would be handing over to Finance Minister Nirmala Sitharaman on Tuesday (12 September) evening to impose 10 per cent additional GST on diesel vehicles and all engines that run on diesel.

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'Say goodbye to diesel'

“Say goodbye to diesel. Take suo motu action, else we will increase the tax so much that you won't be able to sell diesel vehicles,” the minister said.

Speaking on the sidelines of the SIAM event, Gadkari said, "After 2014, 52 per cent of the (number of) diesel vehicles reduced to 18 per cent. Now, that the automobile industry is growing, diesel vehicles shouldn't increase. You make decisions at your level so that diesel (vehicle) is reduced. If it wouldn't happen, then I would recommend to the Finance Minister that diesel is creating a lot of pollution so 10 per cent additional tax should be levied on it."

Gadkari also emphasised the growing focus on biofuels and alternative fuels, noting that this is a top priority as India joined the Global Biofuels Alliance during the G20 Summit.

"India imports 89 per cent of crude oil, which is a significant challenge. Therefore, Prime Minister Narendra Modi has given the highest priority to alternate and biofuels," he said.

Gadkari reiterated his stance on phasing out diesel engines and said it is a hazardous fuel that increases the import bill.

"Diesel has to be phased out one way or another. The industry must take the initiative. Please say bye-bye to diesel or diesel vehicles will face the same consequences as BSIV," the minister said.

Meanwhile, in a tweet the transport minister said, "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."

"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," he added.