Auto stocks fall as Nitin Gadkari says ‘additional 10% GST pollution tax for diesel vehicles’
Speaking at the 63rd Annual SIAM convention, Gadkari said, “I am going to handover a letter to the Finance Minister this evening stating that an additional 10 per cent GST be put on diesel-powered vehicles”
“We will increase tax on diesel to the extent it will be difficult to sell it,” he said adding, “Hope automobile industry will take suo moto initiative to cut down diesel usage”
The minister added he will make this proposal to the finance minister later in the day.
Further noting that diesel a highly hazardous fuel and makes the country dependent on imports, he adds, “Say goodbye to diesel… Please stop making them, otherwise we will just increase the tax so much that it would become difficult to sell diesel cars” Gadkari said.
How the auto stocks reacted?
The comment did not go well for the automakers where the demand has shifted towards bigger utility vehicles like SUVs that are many a times run on diesel. At 12.30 pm, Maruti Suzuki was trading at Rs 1,0462, down Rs 72.90, or 0.69%; Tata Motors at Rs 618, down Rs 16.70, or 2.63%. Eicher Motors down Rs 46.80, or 1.37%, at Rs 3,357.65.
Commercial and bigger utility vehicles are largely run on diesel, meanwhile, some industrial machines and engines such as generators also use diesel.
Automobiles are currently taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle. SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent.
