Introduction

Union Minister for Road Transport and Highways Nitin Gadkari has sought a GST cut to 12 percent on flex-fuel vehicles. They currently attract 28 percent GST, which is the same as hybrids. Electric vehicles, meanwhile, have a much lower tax of 5 percent.

These flex-fuel vehicles can run on various fuels, including a mixture of petrol with ethanol or methanol. With this option, these vehicles would emit fewer pollutants compared to those on pure petrol or diesel. Gadkari has pleaded for a cut in GST to encourage such greener vehicles and bigger use of biofuels.

Addressing the India Bio-Energy & Tech Expo, organized by the Indian Federation of Green Energy, IFGE, and Gadkari underscored the need to bring down India's dependence on fossil fuel. Gadkari said if GST on flex-fuel vehicles was reduced, more and more people would switch over to these eco-friendly vehicles that would help cut down air pollution and reduce the country's fossil fuel imports.

Gadkari said he has spoken about this issue with finance ministers of different states. "We require finance ministers of various states to support biofuel vehicles and hence we will have to reduce the GST on bio-ethanol flex fuel-powered vehicles from the present rate of 28 percent," he said. He also said that he has informed the Maharashtra Finance Minister to attend the GST Council meeting to request a tax cut for such cars. Earlier, Gadkari wrote to Uttar Pradesh Chief Minister Yogi Adityanath to reduce taxes on flex-fuel vehicles.

He pointed out that the country is spending about ₹22 lakh crore annually on importing fossil fuels. This only leads to air pollution and is an economic challenge. Through the use of biofuels, Gadkari said, the country can tackle both the ecological and economic issues. He underlined the fact that biofuels are less costly, more environment-friendly, and would be in the larger interest of the common man.

This push by Gadkari on biofuel adoption is part of the bigger thrust to make India's transport sector greener and less dependent on fuels that the country has to import. He expressed optimism that with assistance from all other stakeholders, including state finance ministers, the use of biofuels can become more widespread for large environmental and economic gains to the country.