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Reward those using clean fuels; subsidise conversion kits to encourage green alternatives, govt urged

04:59 PM May 08, 2021 | PTI

With the government imposing a green tax on old polluting vehicles, Indian Auto LPG Coalition (IAC) is advocating the need for this deterrent to be accompanied by incentives to people shifting to cleaner alternative fuels such as auto LPG.

The Union Ministry for Road Transport and Highways recently approved a proposal to levy a 'green tax' on old vehicles in a bid to curtail pollution and push consumers to switch to environmental-friendly alternatives.

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Notably, hybrid vehicles and vehicles running on clean alternative fuels such as LPG, CNG and ethanol will be exempt from this tax. The initiative aims to make polluters pay for environmental pollution in India's choking cities.

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While welcoming the move as a step in the right direction, Indian Auto LPG Coalition has suggested that penalising polluters should be accompanied by reward for users of clean fuels.

"India's choking cities need to shift a large number of their private vehicles to clean alternative fuels immediately and pushing consumers to switch their existing vehicles to clean alternatives is the quickest way to achieve this. This is why a penalty for polluters must also be accompanied by reward or incentives for citizens switching to clean fuels to make it more impactful," said Suyash Gupta, Director General, Indian Auto LPG Coalition.

Petrol and diesel vehicles including cars, two-wheelers and three wheelers can easily be converted to Auto LPG or CNG by installing conversion kits. Conversion kits that currently cost up to Rs 25,000 can be made significantly more affordable with GST cuts and subsidy support, said that the nodal body for the promotion of Auto LPG in India.

These conversion kits are taxed at a prohibitive GST rate of 28 percent, a policy that is dichotomous to the government's commitment to clean energy.

"Rationalising this prohibitive GST rate on conversion kits to 5 percent has been a long-pending plea of the Auto LPG sector. Reducing this GST rate will make conversion kits more affordable for mass usage," Gupta said.

He further said that the government must also consider subsidising conversion kits for consumers as a move towards incentivizing personal vehicle users to shift to clean gaseous fuels at a mass level. The green tax on polluting vehicles together with incentives for consumers shifting to clean fuels can have a quick and remarkable effect on India's urban air quality, Gupta added.

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