Indian Auto LPG Coalition Advocates for Lower GST on Auto LPG Vehicles

The Indian Auto LPG Coalition has reached out to the Finance Ministry, urging a reduction in GST rates for vehicles running on Auto LPG fuel. In a formal communication addressed to Finance Minister Nirmala Sitharaman, the coalition emphasized the need to incentivize Auto LPG adoption and cut the current GST from 18 percent. The primary focus was to promote LPG as a sustainable automotive fuel option while encouraging Original Equipment Manufacturers (OEMs) to manufacture more Auto LPG variants.

Suyash Gupta, the Director General of the Indian Auto LPG Coalition (IAC), underscored the ecological and economic advantages of transitioning to auto LPG over conventional fuels. Gupta highlighted that LPG emits significantly lower levels of harmful pollutants such as particulate matter, nitrogen oxides, and carbon dioxide, making it a more environmentally friendly choice.

The coalition contended that auto LPG vehicles currently attract an 18 percent GST, a significantly higher rate compared to electric vehicles (EVs) that only incur a 5 percent GST. Additionally, they pointed out that LPG is roughly 40 percent cheaper than petrol, resulting in substantial savings for consumers. Conversion costs from petrol to LPG were estimated at around ₹30,000, significantly lower than the conversion costs to EVs, which range from ₹3-5 lakh.

Moreover, the Indian Auto LPG Coalition proposed that by lowering the GST on Auto LPG and introducing fiscal incentives for OEMs to produce more LPG variants, the accessibility of this cleaner fuel could be enhanced, leading to wider adoption among the general public and facilitating the transition to a more sustainable energy future.

Gupta reiterated, “Auto LPG not only offers a greener alternative but also represents a cost-effective solution for both consumers and the government. By reducing GST on Auto LPG and providing incentives to OEMs similar to those for EVs, we can make this cleaner fuel more affordable, promoting its adoption and supporting the shift towards a sustainable energy landscape.”