Slash GST on Auto LPG, addressing growth-stalling policy issues: Industry to FM
LPG used as fuel in vehicles or Auto LPG, which is one of the cleanest alternative fuels with a’ zero’ global warming potential is currently taxed at 18% GST. Leading industry body Indian Auto LPG Coalition sought GST reduction on Auto LPG as well as on conversion kits for gaseous fuels to encourage the adoption of clean automotive fuels.
LPG used in cars or Auto LPG, one of the cleanest alternative fuels with a’ zero’ global warming potential, is currently taxed at 18% GST. In addition, the GST rates on Auto LPG / CNG conversion kits are prohibitive at 2%, IAC said. High GST rates on renewable fuels and conversion kits are in complete variance with the reported green mobility drive by the government, it said in a statement.
“We are seeking the attention of Finance Minister Nirmala Sitharaman to the imminent need to formulate friendly policies to encourage rapid growth of environmentally friendly transport fuels such as Auto LPG. Auto LPG, which is actively promoted by governments around the world, is facing discriminatory policies in India. It is taxed at a high GST slab of 18%. IAC said LPG is the world’s most widely used alternative fuel with a proven track record of air quality improvement.
Over the past 10 years, Auto LPG’s global consumption has risen by more than 40%, driven by environmental concerns. South Korea, Turkey, Poland, Japan, Australia, Italy, Mexico, and Russia are among the main nations that have successfully embraced this green fuel for their transportation needs.
The association said that while India is planning a long-term transition to electric vehicles, the environmental benefits that can be achieved by adopting low-hanging fruits such as Auto LPG are lacking. Investing in a wider basket of clean alternative transport fuels that are more readily available will lead to an immediate improvement in air quality than EVs that are still a decade away from becoming a co-operator.
“Aside from the need to minimize GST, further important intervention is the reform of the Type Approval requirements regulating the conversion to gaseous fuels. Type Approval standards require companies to renew highly prohibitive Type Approvals for Auto LPG and CNG conversions every three years, which acts as a major obstacle to the industry and has resulted in a rapid decline in the number of players in the market.
Over 26 million vehicles worldwide run on Auto LPG, funded by nearly 71,000 LPG filling stations with over 26 million tons of global Auto LPG consumption. For Auto LPG, claimed IAC, emissions of harmful nitrogen oxides (NOx) and harmful particulate matter PM 2.5 are nearly negligible.
IAC is the nodal body in India which promotes Auto LPG. Gas PSUs, private car LPG distributors, kit suppliers, and equipment manufacturers are members of the Coalition. The coalition works closely with India’s World LPG Association, Indian Automobile Manufacturers Society, and Automotive Research Association
