No Additional 10% GST Rate On Sale Of Diesel Cars, But Gadkari Emphasizes On Carbon Net Zero By 2070

Amidst media reports claiming the likelihood of an additional 10% GST rate on the sale of diesel vehicles, Minister for Road Transport & Highways Nitin Gadkari issued a clarification on Tuesday. Gadkari said that no such proposal for a GST rate has been made, however, he emphasized on the commitment to achieve Carbon Net Zero by 2070. Hence, he said, it is imperative to actively embrace cleaner and greener alternative fuels.

Gadkari took to his Twitter, which is now known as X, to clarify over the media reports. He 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."

Earlier in the day, PTI reported that while speaking at the 63rd Annual SIAM convention here, the minister said that the rising level of pollution is a health hazard for citizens. He reportedly revealed that he is going to hand over a letter to the Finance Minister this evening stating that an additional 10% GST be put on diesel-powered vehicles.

Notably, most of the commercial vehicles in India are running on diesel fuel. Nevertheless, companies like Maruti Suzuki India and Honda have halted manufacturing diesel cars in the passenger segment. While companies like Hyundai, Tata, Mahindra, Jeep, Toyota and Kia still offer diesel-run vehicles.

Calling diesel a hazardous fuel, Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market, reported PTI. Hence, as per the report, Gadkari urged companies to stop making diesel cars, or else the government would just increase the tax so much that it would become difficult to sell diesel cars.

However, Gadkari clarified in his X feed that "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," Gadkari clarified further.

In February, Team-BHP.Com in its report on 2022 car sales figures by fuel choice revealed that under the brand fuel product portfolio mix, Maruti has substituted diesel sales volume with CNG, now offered nearly across its portfolio, while Hyundai and Tata are also following the lead of Maruti in the CNG conversion drive. Further, Mahindra, Jeep, Toyota, and Kia continue to have a diesel-heavy portfolio. Also, Toyota has made some headway with its strong hybrid technology. Finally, the report said that Tata and MG were seen diversifying their product lines with the EV.

Overall, in brand-wise market share, the report revealed that in 2022, Mahindra, and Hyundai-Kia were in the lead in the diesel category. Tata and Toyota came next. Maruti dominates the CNG category and Tata EV category. Toyota, with its strong hybrid technology, has gone mainstream.

On September 12, diesel was priced at Rs 89.62 per litre in the national capital, Delhi. Meanwhile, in other major metro cities like Kolkata, Mumbai, and Chennai, diesel is available at Rs 92.76, Rs 94.27, and Rs 94.33 per litre.

India, at the 26th session of the United Nations Framework Convention on Climate Change (COP 26) in November 2021, announced its target to achieve net zero by 2070.

Last month, in a written reply to Rajya Sabha, Union Minister of State for Environment, Forest and Climate Change Ashwini Kumar Choubey highlighted that India's long-term low-carbon development strategy rests on seven key transitions to low-carbon development pathways. These include i) low-carbon development of electricity systems consistent with development, ii) development of an integrated, efficient and inclusive transport system, iii) promote adaptation in urban design, energy and material efficiency in buildings, and sustainable urbanisation, iv) promoting economy-wide decoupling of growth from emissions and development of an efficient, innovative low emission industrial system, v) development of carbon dioxide removal and related engineering solutions, vi) enhancing forest and vegetation cover consistent with socioeconomic and ecological considerations and vii) economic and financial needs of low-carbon development.