The Indian Auto LPG Coalition (IAC) has requested the national government to lower the Goods and Services Tax (GST) on Auto LPG from the current 18% to 5%, aiming for a level playing field with the newly adjusted tax rates in the natural gas sector.
This plea follows the decision by Andhra Pradesh to reduce the Value Added Tax (VAT) on Natural Gas from 24.5% to 5%, a change that significantly decreases the price of Compressed Natural Gas (CNG) and potentially impacts the market for clean automotive fuels such as Auto LPG.
“Auto LPG is a viable alternative to traditional liquid fuels used by approximately 330 million vehicles in the country, which harm the environment. It offers substantial environmental, economic, and operational advantages to vehicle owners and society,” the Director General of the IAC, stated.
The demand for a GST reduction is part of the IAC’s efforts to create a competitive landscape for all clean automotive fuels. The coalition has also praised the Ministry of Road Transport and Highways (MoRTH) for proposing changes to the Central Motor Vehicles Rules (CMVR) to simplify regulations for vehicles equipped with LPG kits. This includes extending the validity of type approvals from three to six years, with the condition of passing additional performance tests.
He expressed his appreciation for this development, acknowledging the government’s collaboration, “This extension is a welcome development, and we are thankful to the Government of India and MoRTH for their cooperation.”
Auto LPG is recognized for its environmental benefits, such as reduced emissions of carbon monoxide (CO), nitrogen oxides (NOx), particulate matter (PM), and hydrocarbons (HC) compared to traditional fuels. This supports the global movement towards cleaner transportation methods and the pursuit of sustainable development objectives.
The IAC believes that by lowering the GST rate for Auto LPG, the government will greatly enhance the adoption of cleaner fuels, thereby supporting India’s climate commitments and facilitating the country’s progress toward a net-zero future.