Nitin Gadkari asks state FM's to reduce GST on flex-fuel vehicles to 12%

Union Minister Nitin Gadkari on Monday said state finance ministers should consider reducing Goods and Services Tax (GST) on flex-fuel vehicles to 12 per cent in the GST Council meeting.

Addressing IFGE's India Bio-Energy & Tech Expo, Gadkari also said there is a need to reduce imports of fossil fuels and encourage the use of biofuel.

"We need support from finance ministers of different states. The (Union) finance minister assured me that we will try to convince all the finance ministers.

"Yesterday, I asked Maharashtra's FM to attend the GST Council meeting and propose the reduction of GST on flex-fuel engine cars and scooters," he said.

Flex-fuel-compatible cars can run on more than one type of fuel and also on a mixture. Typically, a blend of petrol and ethanol or methanol is used.

The road transport and highways minister informed that he had requested Uttar Pradesh Chief Minister Yogi Adityanath to consider reducing taxes on flex-fuel vehicles.

In a separate meeting with the Maharashtra Finance Minister Ajit Pawar, Gadkari suggested him attend a GST meeting with Union Finance Minister Nirmala Sitharaman on the issue.

At present, 28 per cent GST is levied on vehicles powered by internal combustion engines, including hybrids, and 5 per cent on electric vehicles.

Gadkari also pointed out that every year, India imports fossil fuels of up to Rs 22 lakh crore, and it is not only a problem related to air pollution but also an economic problem.

"So, now by starting this, a day will come when we will reduce our imports and will encourage bio-fuel," he said.

And because of reducing imports of fossil fuels and encouraging biofuel, the minister said, he is confident that the most important beneficiary will be the agriculture sector.

"Today, in the biofuel sector, there is a huge potential," he said.

According to Gadkari, in the India scenario, the cost of biofuel is less and there is no pollution, so that is going to be advantageous to the common man also.

The minister noted that the automobile industry is an important industry for the Indian economy.

"This...industry, which is up till now, creates 4.5 crore jobs. This is the industry, which is giving maximum GST to the state and central government," he pointed out.

Gadkari also said that two-wheeler bike manufacturers like Hero and Bajaj export 50 per cent of the bikes they manufacture in India.

"If we can have a good technology for bio-fuel, our exports will be increased by 10 to 20 per cent more, because in the whole world now, pollution is a big concern," he said.

The minister said as far as the road sector is concerned, India is increasing the length of the National Highways.