Govt mulls additional 10% tax on diesel engine vehicles to reduce pollution

Union Minister Nitin Gadkari on Tuesday said he will seek a "pollution tax" in the form of additional GST of 10 per cent on diesel vehicles and gensets in order to cut down on air pollution.

Speaking at the 63rd Annual SIAM convention here, the Union Road Transport and Highways Minister said the rising level of pollution is a health hazard for citizens.

"I am going to handover a letter to the Finance Minister this evening stating that an additional 10 per cent GST be put on diesel-powered vehicles," Gadkari said.

Most of the commercial vehicles in the country currently run on diesel.

In the passenger vehicle segment, various carmakers including Maruti Suzuki India and Honda have already stopped manufacturing diesel cars.

Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market.

Terming diesel as a hazardous fuel, he noted that the country has to import the fuel to meet the demand.

"Say goodbye to diesel... Please stop making them, otherwise we will just increase the tax so much that it would become difficult to sell diesel cars" Gadkari said.

He said he will propose additional GST on diesel-powered generators as well.

Automobiles are currently taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle.

SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent.

Gadkari also asked the industry to focus on environment-friendly alternative fuels like ethanol.

He also asked the industry to focus on green hydrogen.