• Notification Date: 14-09-2023
• Notification No: N/A

Nitin Gadkari clarifies 'No such proposal' issued regarding Extra 10% GST on Diesel Cars

Union Minister for Road Transport & Highways Nitin Gadkari has denied media reports that claimed he is set to propose 10 per cent additional GST on the purchase of diesel vehicles. 

"There is an urgent need to clarify media reports suggesting an additional 10 per cent 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," Gandhi declared on a social media platform, called X. 

"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 importing substitutes, cost-effective, indigenous, and pollution-free," he added. 

It was reported earlier that the minister was ready to propose an additional 10 per cent goods and services tax (GST) on the purchase of diesel cars in India. Gadkari also reportedly cautioned automakers about the possibility of further increased levies if they continue to sell highly polluting vehicles. 

"Say bye to diesel soon, otherwise we will increase so much tax that it will become difficult for you to sell these vehicles ... we have to leave petrol and diesel soon and walk on the new path of being pollution free," Gadkari was quoted as saying by news agency Reuters. 

Gadkari's comments, according to media reports, came during the New Delhi automakers conference where executives of Tata Motors, Mahindra and Mahindra, Maruti Suzuki and foreign car companies such as Mercedes and Volkswagen were gathered. 

The reports claimed that Gadkari said he would ask Finance Minister Nirmala Sitharaman for an "additional 10%" GST goods and services tax on diesel vehicles as they led to increased pollution. 

Gadkari also highlighted that there has been a decline in the production of diesel cars since 2014, when they accounted for 52 per cent of total production, and now they make up only 18 per cent. 

At present, the government imposes a 28 per cent tax on diesel cars and an additional so-called cess is levied depending on the vehicles' engine capacity. Soon after the media reports surfaced, shares of major automobile companies fell sharply.