Before backtracking, Gadkari said that he would request the finance minister to impose an additional 10 per cent GST on diesel vehicles
Minister of Road Transport and Highways of India, Nitin Gadkari, threatened to impose an additional 10 per cent tax on diesel vehicles before backtracking his comments on the social media platform X, formerly Twitter. He said he would request the finance minister on such matters as part of his push to phase out diesel vehicles from the auto market.
Needless to say, diesel passenger vehicles are not the only reason for the alarming increase in pollution across the country, strict actions will possibly be implemented to shelve oil burners according to him. The increase in car prices and the arrival of more stringent emission standards have led to carmakers discontinuing diesel powertrains in most of the segments over the last few years.
It is more than apparent that new innovations and more tax relaxations on alternative fuels and electrified vehicles are needed to see through the future and bring down pollution. He wrote on X: “It is essential to clarify that there is no such proposal currently under active consideration by the government,” but there is no smoke without fire in this case?
At the annual convention of auto manufacturers’ body SIAM, Gadkari said that he would request the finance minister to impose an additional 10 per cent GST on diesel vehicles as he found it to be the “only way” to phase out them. If it turns out to be the case anywhere in the future, the existing GST will be up by 10 per cent – from 48 per cent to 58 per cent.
The net changes will be around 6.5 to 7 per cent if this is implemented and this may lead to the prices of the Toyota Fortuner up by Rs. 3 lakh to Rs. 3.5 lakh while the Tata Safari may get costlier by Rs. 1.5 lakh to Rs. 1.8 lakh, Tata Harrier by Rs. 1.4 lakh to Rs. 1.6 lakh and the Mahindra Scorpio by 1.4 lakh to 1.8 lakh.
The presence of diesel cars on sale has reduced from 50 per cent to just 18 per cent over the last decade. In the last fiscal, around 9.62 lakh units of commercial vehicles were retailed in India with a YoY growth of 34 per cent while the passenger vehicle sales were up by 27 per cent with a total of 39 lakh units.