Gadkari calls for reducing GST on flex-fuel vehicles to 12%

New Delhi: Minister for Road Transport and Highways Nitin Gadkari made a pitch for reducing Goods and Services Tax (GST) on flex-fuel vehicles (FFVs) from the current 28 percent to 12 percent. Speaking at the inauguration ceremony of India Bio-Energy & Tech Expo on Monday, Gadkari stressed on the need to make FFVs and ethanol100, or E100 fuel, economically viable for increasing their adoption. “To make the Ethanol100 fuel and flex engine vehicles a success story, the country requires economic viability,” said the minister.

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The minister said that the proposal to reduce the GST on flex-fuel vehicles to 12 percent needs to be placed before the GST Council. “We need support from finance ministers of different states. The Union Finance Minister (Nirmala Sitharaman) has assured me that we will try to convince state finance ministers,” he said.

“Yesterday, I discussed with the Finance Minister of Maharashtra. And I told him, please go to the meeting and put up this proposal of reducing GST up to 12 percent on flex-engine cars, scooters. That is to be a great thing for all of us,” said Gadkari.

Flex fuel vehicles can utilise more than one type of fuel and also a mixture of fuels. In India, such vehicles can run on petrol or the recently-launched, E100 fuel. E100 fuel includes 93-93.5 percent ethanol blended with 5 percent petrol and 1.5 percent co-solvent, which is a binder. Indian Oil has started retailing E100 fuel across 400 outlets in the country since March this year.

Bio-energy will be 50 percent of fossil fuels in five years: Gadkari

Emphasising that the future of bio-energy is very good, Gadkari said, “Today I can say with confidence that in five years, the size of biofuel industry will be at least 50 percent of fossil fuels.” He stated that India needs to focus on biofuels not only to solve problems related to air pollution but to reduce its import bill. “Every year, India spends Rs 22 lakh crores on importing fossil fuels. So, fossil fuel usage is not just an environmental problem, it is also an economic problem,” said the minister. He added that providing a fillip to the biofuel industry will also benefit those engaged in the agriculture sector.

‘Need to figure out how to increase biomass production for biofuel manufacturing’

While listing a key area of concern in the sector, the minister asked the industry stakeholders to figure out ways of increasing biomass production for biofuel manufacturing. “I will request you to find out how we can increase the production of biomass which can be useful for making bio-fuel. Farmers can maybe take energy crops. It can be also a good thing for the availability of raw material. I have given you an example. But we need to figure out how to increase the production of biomass,” he said.

India can export biofuels to other countries: Gadkari

Gadkari said that if India is able to increase its biofuel production, it can open up opportunities for export. “I got an opportunity once upon a time to discuss with the Prime Minister of Bangladesh and with the Prime Minister of Sri Lanka, opportunities in the biofuels sector. And I was told that Iran is in a position to export ethanol to Sri Lanka and Bangladesh. So my feeling is that day by day, there is a huge potential in the domestic market and also in the international market for export of biofuels,” he said.

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