Union minister Nitin Gadkari proposes 10% GST hike on diesel-powered vehicles

NEW DELHI: Union road transport minister Nitin Gadkari said there is no proposal for increasing the GST on the sale of diesel vehicles.

In a clarification issued barely two hours after he said that he would suggest the finance minister to increase GST by 10% on sale of such polluting vehicles, the 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 posted on X (formerly known as twitter).

Earlier, speaking at an event of the automobile lobby group, Society of Indian Automobile Manufacturers (SIAM), Gadkari said, "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.” He had also said he would speak to finance minister on whether the GST can be increased for diesel vehicles.

He said the share of diesel car has reduced in the past nine years from 33% in 2014 to 28% now, which is a good sign of how the industry on its own has taken initiatives.