Heavy industries ministry weighs reduction of GST on flex fuel vehicles

The heavy industries ministry is examining requests seeking reduction in GST on flexible fuel vehicles (FFVs) from the current 28 per cent, sources said.

The ministry is in consultation with various stakeholders and other government departments. Once the consultations are completed, the ministry will submit a recommendation to its finance counterpart. Thereafter, the GST Council will take a decision on the issue, a senior official said.

"We have received representations seeking reduction in GST on flex fuel vehicles. We are conducting meetings on this issue to ascertain the views of various stakeholders and different ministries. But we are getting a mixed response. Some people say that GST and cess should be reduced on FFVs because the government is promoting their adoption. Currently FFVs attract GST rate of 28 per cent, plus 15 per cent cess," the official added.

"We have been asked to review whether or not the GST on FFVs needs to be brought down," the official said requesting anonymity.

Flex fuel is an alternative fuel made of a combination of petrol and methanol or ethanol. FFVs come equipped with internal combustion engines designed to run on more than one type of fuel.