Maruti Suzuki, India’s largest car maker with a 51 percent market share, is hoping for a reduction in Goods and Services Tax (GST) on CNG cars from 28 to 18 percent.
In an exclusive interview with CNBC-TV18, Maruti Suzuki India Limited Chairman RC Bhargava said there was a strong case in favour of reducing GST on CNG cars, which would in turn help reduce pollution and import bill.
In a bid to promote more electric vehicles (EVs), the Central government has imposed a 12 percent GST rate on EVs compared to a 28 percent GST on all other categories of automobiles, including CNG. Hybrid vehicles attract a 43 percent tax rate which includes the 28 percent GST rate.
“CNG technology is well established and consumers are happy to buy CNG cars. CNG cars reduce our import of crude oil and CNG is cheaper than crude oil. Its sources of supply are also diversified and there is no shortage,” said Bhargava. He added that CNG as a fuel was far more environment friendly than either petrol or diesel.
India imported 226.6 MMT of crude oil in 2018-19 at a cost of $112 billion. Total LNG imports in 2018-19 were 27,015 MMSCM at a total cost of $9.6 billion.
Bhargava said OEM-manufactured CNG kits and OEM-fitted CNG cars are safer and help in reducing foreign exchange outflow, as they are made in India. “Currently three cars are retrofitted with CNG kits for every OEM-fitted CNG car. Retrofitted CNG cars are cheaper than factory-fitted ones by at least Rs 25,000 but they have safety issues because of norm violations. Therefore, to promote the sale of OEM-manufactured CNG cars, the GST rate on them must be reduced from 28 to 18 percent,” he noted.
Bhargava praised Petroleum Minister Dharmendra Pradhan for his efforts towards adoption of cleaner fuels such as biofuels, bio-CNG, ethanol and methanol. In September last year, Pradhan had said that India would have 10,000 CNG stations in the next ten years. Currently, there are 1,762 CNG stations in the country and 33,64,256 CNG vehicles.
First Published: IST