• Notification Date: 30-08-2023
• Notification No: N/A

Sugar Industry Body ISMA appeals for 5% GST On Flex Fuel Vehicles like Electric Vehicles

Sugar industry representative Indian Sugar Mills Association (ISMA) has called for a 5 per cent GST rate on flex fuel vehicles (FFVs), equivalent to that of electric vehicles (EVs), to accelerate the adoption of ethanol-petrol blends for automobiles. Flex fuel vehicles combine petrol and ethanol in varying proportions.  

While India has achieved a 10 per cent ethanol blend (E10) in petrol, it aims for E20 by 2025. Presently, FFVs are subject to a 28 per cent GST rate, whereas electric vehicles attract a 5 per cent GST. This change could have a dual impact, reducing India's fuel costs and curbing carbon emissions from the transport sector. 

ISMA has formally appealed to the Ministry of Road Transport and Highways for a GST relaxation on FFVs. Aditya Jhunjhunwala, the President of ISMA, emphasised the need for consistency in GST treatment between FFVs and EVs, promoting environmentally responsible choices without undue financial burden. Incentivising eco-friendly vehicle adoption through tax deductions for FFVs could steer consumers toward greener transportation alternatives. 

Additionally, ISMA has engaged with the Automotive Research Association of India (ARAI) to explore the potential of anhydrous ethanol blends with gasoline (E-100), like successful implementations in Brazil. This collaboration envisions a future where cleaner fuel options seamlessly integrate, fostering sustainability in the automotive sector.  

India's government aims for a 12 per cent ethanol blend with petrol in the 2022-23 ethanol supply year ending November. Ethanol, procured from sugar mills as well as rice and maize, plays a vital role in reducing carbon footprint.