Union Minister Nitin Gadkari Denies Plans for Extra 10% GST on Diesel Cars : Issues Clarification

In response to recent media reports suggesting that Nitin Gadkari was considering proposing an additional 10% Goods and Services Tax (GST) on diesel vehicles, the Union Minister for Road Transport & Highways has categorically refuted these claims. Gadkari clarified that there is currently no active government proposal for such an additional GST on diesel cars.

Addressing the issue on social media, Gadkari emphasized the government’s commitment to achieving Carbon Net Zero by 2070 and reducing air pollution levels, primarily caused by hazardous fuels like diesel. He stressed the importance of embracing cleaner and greener alternative fuels that are cost-effective, indigenous, and pollution-free, in line with these goals.

Previously, there were reports suggesting that Gadkari was ready to recommend a 10% additional GST on diesel car purchases in India. He also cautioned automakers about the potential for increased levies if they continue to produce highly polluting vehicles.

During an automakers conference in New Delhi, attended by executives from companies like Tata Motors, Mahindra and Mahindra, Maruti Suzuki, Mercedes, and Volkswagen, Gadkari reportedly stated, “Say goodbye to diesel soon, otherwise we will increase taxes to the point where it becomes challenging to sell these vehicles. We must transition away from petrol and diesel and embrace a pollution-free future.”

Gadkari pointed out that the production of diesel cars has declined significantly since 2014 when they accounted for 52% of total production. Currently, they make up only 18%. The government currently imposes a 28% tax on diesel cars, with an additional cess based on engine capacity.

The initial reports led to a sharp decline in the stock prices of major automobile companies.