Nitin Gadkari Calls on Carmakers to Abandon Diesel Engines; Proposes 10% Extra GST as ‘Pollution Tax’

In a resounding message to India’s automotive industry, Nitin Gadkari, the road transport minister, has urged vehicle manufacturers to transition away from diesel engines as swiftly as possible. Addressing attendees at the 63rd annual convention of the Society of Indian Automobile Manufacturers (SIAM), Gadkari cautioned carmakers about the continued use of diesel-powered vehicles, characterizing diesel as a “highly hazardous fuel” that exacerbates the nation’s air pollution challenges.

Diesel Car Soon To Witness A End In India

Moreover, the minister floated the idea of imposing additional GST on diesel vehicles, framing it as a ‘pollution tax,’ aimed at dissuading manufacturers from persisting in the production of diesel-driven models. However, he later took to the social platform X (formerly Twitter) to clarify that ‘there is currently no such proposal actively being considered by the government.’

“I have prepared a letter. Today, at 5:30 p.m., I have a meeting with Finance Minister [Nirmala Sitharaman]. I will request that in the time to come, all diesel-engined vehicles should attract an additional 10 percent GST levy, so that the transformation happens soon, otherwise [people in the auto industry] are unlikely to listen soon. You can change my thinking. I humbly request you to change things and lead the diversification yourself. Else, I will have to ask the FM to consider levying a pollution tax (additional GST) on everything that runs on diesel. I’m sure things won’t get to that stage,” Nitin Gadkari said at a media gathering.

In his address, Gadkari emphasized that in 2023, sales of diesel vehicles constituted merely 18 percent of the total vehicle sales, a significant drop from the 53 percent recorded in 2014. Underlining the imperative to transition towards cleaner alternatives like ethanol, CNG, and electric vehicles, Gadkari cautioned that if companies remained resistant to change, there might be substantial tax increases on diesel-powered vehicles. Such elevated taxes could render these vehicles prohibitively expensive, making it challenging for manufacturers to find buyers in the market.

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