Reduction in GST, subsidy on conversion kits to push Auto LPG growth

A reduction in GST rates on auto LPG and subsidies on conversion kits can spur the use of LPG as a fuel in automobiles, Indian Auto LPG Coalition (IAC) said on Tuesday emphasising the need to recast vehicular fuel mix with a greater share of cleaner alternatives.

In a statement, IAC, the nodal body and a leading advocate of cleaner and greener fuels, said concurrent to the temporary benefits accrued during lockdowns, a number of recent studies have highlighted how air pollution needs to remain a top concern for the country.

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"Not only is auto LPG 40-50 per cent cheaper than the carbon-based petrol and diesel, but its emissions are also negligible as compared to the conventional fuels. So, adoption of auto LPG leads to purer air and cleaner environment, reduced public health burden and lower mobility cost," it said.

It quoted a Greenpeace report of last month to say that the eight most populous state capitals have experienced an increase in Nitrogen Dioxide (NO2) levels between April 2020 and April 2021, upending the supposedly lockdown-driven air quality improvement thesis.

Since NO2 is one of the principal products of vehicular pollution, there is an urgent need to redraw attention to the vehicular fuel policy in the country, it said.

"For quite some time now, we have been urging the government to adopt a vehicular fuel policy that would reflect the reality of ever-persistent and even deteriorating air pollution levels in our country, especially in the urban areas," said Suyash Gupta, Director General, IAC.

Among the eight cities highlighted in the Greenpeace report, Delhi has registered the maximum rise in NO2 levels at 125 per cent between April 2020 and April 2021.

"Another report by CSE has found higher pm 2.5 levels in Jan-March 2021 than those for the same months in previous two years," he said.

Stating that the government must do an instant rethink on its vehicular fuel policy, Gupta said an immediate shifting of auto LPG from the high GST slab of 18 per cent to the modest 5 per cent slab is required.

Similarly, it would also need the government to subsidize the market rates of auto LPG conversion kits by way of removing the latter from the prohibitive 28 per cent GST slab to lower slabs.

"When combined with relaxing of Type approval norms governing conversion to gaseous fuels, the resultant push to the retrofitment market would be a much-needed stimulus for the growth of auto LPG uptake in the country," he added.