Reduce GST rate on LPG conversion kits to 5%, urges Auto LPG industry

Auto LPG industry in the country has sought a reduction in GST rates on LPG conversion kits for automobiles from current 28 per cent to 5 per cent to boost vehicle conversions to the environment-friendly fuel.

Indian Auto LPG Coalition, the apex industry body for auto LPG in India, said that high GST rates were hampering conversion to LPG, which is much cleaner transport fuel as compared to petrol.

In a statement, the association said putting an efficient and non-polluting fuel under the highest GST slab is counter-productive to the government's focus on cleaning India's urban air quality. The high GST rates are proving detrimental to the conversion industry and hampering the growth of the clean and environment-friendly transport fuel.

"An auto LPG conversion kit is not a luxury item which is placed under the highest GST slab. At a time, when our cities have been reeling under the impact of harmful vehicular emissions, all efforts must be initiated to push consumers towards using cleaner fuels. Conversion of vehicles to auto LPG has to be promoted by making them more affordable and easily available," said Suyash Gupta, Director General of Indian Auto LPG Coalition.

He said such a prohibitively high GST rate is driving up the costs of conversion kits and discouraging consumers.

"Auto LPG is a very clean transport fuel with almost negligible particulate material emissions, and can bring about immediate improvements in air quality," he said.

The association said auto LPG has become a major draw in several countries and has helped clean up their urban environments, thanks to favourable policy measures.

A prominent example is South Korea which records 4 million tonnes in sales of this fuel annually. Turkey runs almost 40 per cent of all private vehicles on auto LPG.

"Another detrimental policy that is hindering the growth of auto LPG is the archaic Type Approval norms governing vehicle conversions to gaseous fuels. The Type Approval norms of the Ministry of Road Transport in India require companies to renew extremely cost prohibitive Type Approvals for Auto LPG and CNG conversions every three years. This has resulted in a rapid dwindling of players in the retro-fitment market," the statement said.

With a little policy support, auto LPG can become a viable alternative transport fuel for both four-wheelers as well as 2 wheelers.

"Even as we work on making electric vehicles a reality on Indian roads in the long term, we must not ignore more readily available options and lose sight of more easily do things to fight environmental pollution. Encouraging auto LPG conversion is one of the most viable and easy solutions to our air quality concerns in the short term, Gupta said.

Auto LPG emits almost negligible particulate matter than either diesel or petrol vehicles; 96 per cent lesser nitrogen dioxides (NOx) than diesel; 68 per cent lesser NOx than petrol. NOx is hugely responsible for respiratory ailments among urban dwellers. Auto LPG also emits about 22 per cent lower carbon dioxide (CO2) than petrol which is comparable to the CO2 emissions of CNG.

With rising crude prices becoming a major headache for the Indian economy, increasing usage of Auto LPG in the short run can also help cut India's import bill, the statement said, adding Auto LPG is more than 40 per cent cheaper than petrol.