No consensus yet over GST cut on flexfuel vehicles
The Centre is in discussions with the industry on the proposed lowering of the Goods and Services Tax (GST) on flexfuel vehicles (FFVs) from the current 28 per cent, but there is no consensus yet as stakeholders remain divided.
Senior officials at the Ministry of Heavy Industries (MHI), along with some industry representatives and senior officials from other departments concerned, had a meeting recently to look into the matter, but no final decsion was made as some of the companies did not agree to the proposal, multiple sources told businessline.
“We are conducting meetings...we are asking the stakeholders and different Ministries their views on the subject, but we are getting a mixed response. Some say that GST and cess should be reduced on flexfuel vehicles because the government is promoting its adoption. But some others are opposing it,” a senior official at MHI told businessline on condition of anonymity. According to another source privy to the matter, Tata Motors and M&M are the two OEMs that are objecting to the lowering of GST on flexfuel vehicles because of their strong portfolio of EVs. The official said that there is no final decision yet and there will be more meetings on the same subject in the coming days.
28% GST RATE
Currently, the FFVs attract a GST rate of 28 per cent, plus a 15 per cent cess. Except for electric vehicles (5 per cent GST) and hydrogen fuel cell vehicles (12 per cent GST), all other vehicle categories (including twowheelers) attract a GST of 28 per cent.
All original equipment manufacturers (OEMs) have to make at least one model, which runs on flex fuel, the official said.
“All companies manufacturing fourwheelers and twowheelers are required to make at least one model which is a flexfuel vehicle. Everyone has to do it, whether it is Maruti Suzuki, Tata Motors, Mahindra & Mahindra or Hyundai Motors. But there continues to be disagreement over whether GST should be lowered,” the official explained. The MHI is expected to review this question and submit its version to the Finance Ministry and GST Council as early as possible, the official said. Much would depend on whether the automobile industry can come put forward a “similar” viewpoint, he added.