'No such proposal': Nitin Gadkari dismisses reports of 10% additional tax on diesel-engine vehicles

Union Minister Nitin Gadkari said on Tuesday that he plans to propose imposing an additional 10 per cent tax on diesel engine vehicles. Speaking at the 63rs SIAM Annual Convention, Gadkari said that he will make this proposal to Finance Minister Nirmala Sitharaman later in the day. The transport minister called it the “pollution tax” and stated that it is the only way to reduce usage of diesel vehicles in the country. The minister later issued a clarification regarding the same. 

He said this is the only way to bring about a transformation to cleaner energy, otherwise people do not seem to be in a “mood” to listen. Gadkari asked the auto industry to encourage diversification to this end. “We are making good roads, which has led to a growth in the automobile industry, in turn leading to benefits of the automobile component players,” he said, adding that the industry will obviously be very happy but the Indian people will be very unhappy because of the pollution. 

During his speech at the conference, Gadkari also requested the auto industry to reduce the production of diesel vehicles. He urged the industry to move from petrol and diesel to cleaner fuels, failing which he said that the government will have to add additional taxes. 

This is not a tough task, it has already been done everywhere in the world, Gadkari said. The technology is available, he said. To make us independent of diesel and petrol, you should take suo motu initiatives, and assist us in our transition plans, he told the auto industry members. 

The minister said that this is the right time for the transition from diesel and petrol to “biofuels, alternative fuels and energy sources for mobility”. 

He underscored that the auto industry was at the 7th position in 2014 but has now climbed up to the 3rd position. “The Indian Auto Industry has transformed from 4.5 lakh crore to 12.5 lakh crore industry,” he said. 

Shares of Indian automakers Tata Motors, Mahindra and Mahindra and Ashok Leyland fell between 2.5 per cent and 4 per cent after the minister's comments.

'No such proposal currently under active consideration,' says Nitin Gadkari

Meanwhile, Nitin Gadkari later issued a clarification on X (formerly Twitter) stating that no such proposal is currently under active consideration by the government. 

"There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government," Gadkari said.  

"In line with our commitments to achieve Carbon Net Zero by 2070 and to reduce air pollution levels caused by hazardous fuels like diesel, as well as the rapid growth in automobile sales, it is imperative to actively embrace cleaner and greener alternative fuels. These fuels should be import substitutes, cost-effective, indigenous, and pollution-free," he added. 

(CORRECTION: The copy and the headline have been updated to include the clarification issued by Nitin Gadkari)

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