‘Will increase tax so much you’ll find it difficult to sell’, Gadkari says as he proposes 10% tax on diesel vehicles
GST on diesel engine vehicles, a move aimed at boosting climate-friendly vehicles in one of the most polluted countries. Calling it a 'pollution tax', Nitin Gadkari at the 63rd SIAM Annual Convention said it is the only way to reduce the usage of diesel vehicles in the country.
«Request industry to reduce production of diesel vehicles else imposing additional tax will be necessary,» Gadkari said.
“I would urge you to reduce production of diesel vehicles.
If you don’t reduce, we have to increase taxes. We will increase taxes so much, you will find it difficult to sell diesel vehicles”, Gadkari said.
Sales of diesel vehicles in the Indian market has declined since prices of the fuel was de-regulated in 2014.
About 18% of all passenger vehicles sold in the local market run on diesel in the last financial year, from 53% in FY14.
Gadkari said the automobile industry should work on accelerating the transition to electric, bio-fuels to curb vehicular pollution and crude imports.
However, levying a 10% additional indirect tax on such vehicles will take a toll on the automobile industry's sales as almost all commercial vehicles in India typically run on diesel.
Following Gadkari's statements at the convention, share prices of M&M, Tata Motors and Maruti Suzuki were trading with losses of 2.38 per cent, 2 per cent and 0.8 per cent each, as on 12:00 pm.
Gadkari has made his views clear on the drawbacks of diesel vehicles in the past as well. Back in 2021, Gadkari had called for vehicle manufacturers to discourage the production and sale of diesel-engine vehicles and urged them to promote other technologies.
Earlier in May, the Energy Transition Advisory Committee had suggested that India should ban diesel-powered four-wheelers in
