Indian Sugar Mills Association (ISMA) urged the government to levy 5% GST (Goods and Service Tax) on flex-fuel vehicles (FFVs), the same as that on electric vehicles (EVs), which would speed up the process of adopting ethanol blending with petrol as fuel for automobiles.
India has achieved E10 (blending of 10% ethanol in petrol) and has set a target to achieve 20% by 2025. The flex fuel vehicles use a mix of petrol and ethanol in various proportions.
ISMA issued a statement recently stating that the GST on electric vehicles is 5% and on FFVs is 28%. Reducing the GST on FFVs to 5% would boost the production and sale of these vehicles which will ultimately help in reducing India’s expenditure on fuel and lowering carbon emission.
ISMA has approached the Ministry of Road Transport and Highways for relaxation in GST on FFVs.
Aditya Jhunjhunwala, president of ISMA said, “Presently, FFVs are levied with a GST rate of 28 percent, a notable contrast to the 5% GST rate applicable to electric vehicles. We request parity in the GST rebate for FFVs.”