Automobile industry demands 5% GST on flex fuel two-wheelers

New Delhi, June 29 (KNN) The automobile industry in India has requested a 5 per cent Goods and Services Tax (GST) on two-wheelers running on flex fuel, similar to electric-powered vehicles, said a senior official aware of the development.

As per reports, the industry is seeking fuel at a price 35 per cent lower than E10 to compensate for loss of fuel efficiency, better running costs and increase customer acceptability of these vehicles,

Vehicle prices are expected to go up with the mandated implementation of E20 blends in fuel from 2025. Vehicles in India currently run on E10 blend.

Flex fuel vehicles run on petrol with higher ethanol blend (E20-E75) entailing lower consumption of fossil fuels but have lower mileage than internal combustion engine ones due to lower calorific value of the mix.

According to a report in TOI, the recommendations to the government have been made by Society of Indian Automobile Manufacturers (SIAM).

India’s leading two-wheeler makers from Hero MotoCorp to Bajaj Auto and TVS Motor Company are set to commence mass production of one flex fuel two-wheeler each by September/October 2024. For passenger vehicles, given complexity of product mix and volume constraints, timelines for mass introduction of flex fuel vehicles have been set in April 2027.

Increased utilization of flex fuel for mobility needs will help provide an additional source of income to farmers who comprise 58 per cent of the workforce in the country.

These considerations have made the Centre double down on efforts to promote the Ethanol Petrol Blending Programme (EPPB), ahead of the general elections next year.  (KNN Bureau)