Carmakers like Maruti Suzuki and Honda have halted manufacturing of diesel passenger vehicles.
Digital Desk: Union Transport Minister Nitin Gadkari today issued a warning to Indian car makers, saying that if they do not reduce their production, the government will be forced to raise taxes on diesel vehicles and make sales "difficult."
"Say goodbye to diesel...... Please stop making them because if don't, we will raised the tax to such an extent that it will be difficult to sell diesel vehicles," Mr. Gadkari said in a speech at the 63rd Annual SIAM Convention in New Delhi.
The minister stressed that there was not yet a precise proposal for such a raise under discussion, despite initial reports indicating that the additional tax hike may be as high as 10%.
"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 said in a post on X, formerly Twitter.
Currently, cars are subject to a 28% GST as well as an additional cess, which can range from 1% to 22% depending on the kind of vehicle. SUVs are subject to the highest tax rate (28% GST plus 22% cess).
The minister described diesel as a "hazardous fuel" and claimed that it led to India's dependence on fuel imports as a result of increased demand. He noted that the percentage of diesel vehicles has decreased from 53% in 2014 to 18% at this time, calling it a "good sign".
The minister urged automakers to change the way they produce their products so that they concentrate on eco-friendly fuels like ethanol and green hydrogen, which might speed up the introduction of more electric vehicles on Indian roads.
It is to be noted that carmakers like Maruti Suzuki and Honda have halted manufacturing of diesel passenger vehicles.
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