Indian Auto LPG coalition writes to Finance Ministry to lower GST on Auto LPG

The Indian Auto LPG Coalition has written to the Finance Ministry to incentivise Auto LPG and reduce GST on vehicles plying on LPG from the current 18 per cent. In a letter addressed to Finance Minister Nirmala Sitharaman, the coalition requested the ministry to focus on promoting LPG for automotive use while also encouraging Original Equipment Manufacturers (OEMs) to produce Auto LPG variants.

Suyash Gupta, Director General of the Indian Auto LPG Coalition (IAC), highlighted the environmental and economic benefits of adopting auto LPG over traditional fuels. The letter states that LPG produces “substantially lower emissions of harmful pollutants such as particulate matter, nitrogen oxides, and carbon dioxide."

Gupta wrote, "Auto LPG is not only an environmentally friendly alternative but also a cost-effective solution for consumers and the government alike. By reducing the GST on Auto LPG, and also encouraging the OEMs to rollout more LPG variants through fiscal incentives on the lines of those for EVs, we can make this cleaner fuel more accessible to the masses, encouraging its adoption and supporting the transition to a more sustainable energy future."

The LPG coalition argued that LPG-powered vehicles currently attract 18 per cent GST, which is substantially higher than electric vehicles that attract only 5 per cent GST. Moreover, it stated that LPG is 40 per cent cheaper than petrol providing significant savings. It also said that the conversion cost from petrol to LPG would be around ₹30,000, as against ₹3-5 lakh for an EV. The coalition further said that LPG would emerge as a cleaner and more cost-effective alternative fuel and also requested the ministry to ensure a level playing field for Auto LPG in its letter.

"Approximately 330 million vehicles in the country currently operate on environmentally harmful liquid fuels. Auto LPG presents a compelling alternative to traditional gasoline and diesel, offering significant environmental, economic, and operational benefits for both vehicle owners and society. With the right fiscal policies, Auto LPG can play a crucial role in reducing vehicular emissions and driving economic savings for consumers. We urge the Finance Ministry to consider our appeal for a GST reduction, which will significantly contribute to our shared vision of a cleaner and greener India," Gupta added further.

This is not the first time the coalition has demanded a reduction in GST. It made a similar appeal in 2021. It demanded a comprehensive vehicular policy that would promote greener alternatives to petrol and diesel in 2022.

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