• Notification Date: 31-01-2025
• Notification No: N/A

Ministry of Heavy Industries & Auto Industry Stays in the Queue for CNG Vehicles GST Rate Cut Before Budget 2025

Ahead of the 2025 Union Budget, the Ministry of Heavy Industries and the auto industry leaders are pushing for this reduction in GST on CNG vehicles.
The prime demand has been a reduction in GST on CNG-run automobiles from 28% to the almost 5% GST charge on electric vehicles, or EVs. The pressure is coming because CNG vehicles were once seen as an environmentally friendly mode of transportation, but their GST rate has not decreased over time, whereas EVs have been getting strong government support over the past few months.

Industry representatives argue that the government must treat CNG vehicle users the way it treats electric vehicle users; it can favor them by providing incentives, thus making them relatively affordable to customers.
The government has on many occasions been very categorical in showing support for electric mobility but has turned down requests by the Japanese automotive lobby to lower taxes on hybrid vehicles.

Finance Minister Nirmala Sitharaman has consistently stayed away from directly influencing adjustments in GSTs, as the idea of changes vests with the GST Council, with state ministers composing it.
Anyway, the insistence for a readjustment in GST is under the current context of discussions prevailing within the GST Council to rectify the structures of taxes between various industries and sectors. Meanwhile, another body of ministers also reviews the cess levied against it, augmenting the levy on CNG vehicles.

Demand for relief on tax for CNG vehicles is becoming louder, bringing home the fact that there is an immediate need to do justice in balancing support towards cleaner transport as the ministers continue to actively restructure the GST framework and it’s working on issues such as cess.
For an auto sector, it will focus majorly on tax cuts for the budget on CNG vehicles.