Auto Industry Seeks GST Cuts as Budget Approaches

As the Union Budget approaches, the auto industry is urging the government to reduce the Goods and Services Tax (GST) on CNG vehicles from 28% to a rate closer to the 5% charged on electric vehicles (EVs). Industry representatives argue that this tax reduction could facilitate a smoother transition to cleaner transportation, especially as EV adoption faces infrastructure challenges. Additionally, the automotive sector is advocating for a simplified GST rate structure and a reduction in GST for hybrid vehicles, which currently face high tax rates. The government has maintained a strong focus on promoting EVs, resisting calls from Japanese automakers to lower taxes on hybrids. Meanwhile, the Ministry of Heavy Industries is engaged in discussions regarding the rationalization of GST and the potential for adjustments to the cess applied to automobiles. The outcome of these discussions could significantly impact the tax framework for the auto sector in the near future.