On Tuesday, the Union minister of road transport announced that he would impose an additional 10% tax on diesel vehicles and forewarned automakers of impending taxes that would drive them to abandon diesel engines and reduce pollution and fuel emissions.
At the Society of Indian Automobile Manufacturers (SIAM) annual meeting in New Delhi, where executives from Tata Motors, Mahindra & Mahindra, Maruti Suzuki, and multinational automakers like Mercedes and Volkswagen had gathered, Nitin Gadkari made the remarks.
In order to address issues with pollution, Mr. Gadkari stated he will approach the finance minister for a “additional 10%” goods and services tax on diesel vehicles later on Tuesday. India presently charges a 28% tax plus an additional “cess” based on the size of the vehicles’ engines.
Say goodbye to diesel as quickly as possible, Mr. Gadkari warned the conference, or else we’ll raise taxes so high that it will be difficult for you to sell these cars.
“We must quickly abandon gasoline and diesel and move forward on the new path of being pollution-free. He issued a caution to automakers, saying that they should diversify as soon as possible.
At the Delhi conference, Mr. Gadkari’s remarks generated a great deal of discussion among the auto executives in attendance. Some called the decision to tell Reuters that it was a “bombshell” statement. Santosh Iyer, managing director of Mercedes India, stated that many customers still like diesel vehicles and that any change in tax laws will result in a change in the “portfolio strategy” of automakers.