LPG conversion kits, which allow vehicles to run on LPG rather than petrol or diesel, are not luxury commodities and should be taxed under GST at 5% rather than the highest rate of 28%, the Indian Auto LPG Coalition (IAC) said in a statement.
While several countries worldwide have adopted the cleaner fuel, policy in India has, in fact, been a detriment to its adoption, the Coalition added.
“An auto LPG conversion kit is not a luxury item which is placed under the highest GST slab,” Suyash Gupta, director general of the Indian Auto LPG Coalition, said. “At a time when our cities have been reeling under the impact of harmful vehicular emissions, all efforts must be initiated to push consumers towards using cleaner fuels.”
“Conversion of vehicles to auto LPG has to be promoted by making them more affordable and easily available,” Mr. Gupta said. “Unfortunately, such a prohibitively high GST rate is driving up the costs of conversion kits and discouraging consumers.”
Mr. Gupta further said that putting an efficient and non-polluting fuel under the highest GST slab is counter-productive to the government’s attempts to clean India’s urban air quality.
According to the IALC, South Korea and Turkey have taken the lead in adopting auto LPG, with South Korea recording 40 lakh tonnes in sales of the fuel annually, and Turkey running nearly 40% of its private vehicles on auto LPG.
“Another detrimental policy that is hindering the growth of auto LPG is the archaic type approval norms governing vehicle conversions to gaseous fuels,” Mr.Gupta added. “The Type Approval norms of the Ministry of Road Transport in India require companies to renew extremely cost prohibitive Type Approvals for Auto LPG and CNG conversions every three years. This has resulted in a rapid dwindling of players in the retro-fitment market.”
Mr.Gupta further said that the government’s vision to adopt electric vehicles in the long-term does not preclude the adoption of auto LPG as the fuel of choice in the short to medium term.
“Even as we work on making electric vehicles a reality on Indian roads in the long-term, we must not ignore more readily available options and lose sight of more easily done things to fight environmental pollution,” Mr. Gupta said. “Encouraging auto LPG conversion is one of the most viable and easy solutions to our air quality concerns in the short term.”
According to research provided by the IALC, auto LPG emits 96% lower amounts of nitrogen dioxides (NOx) than diesel and 68% lower nitrogen dioxide emissions than petrol. The fuel also emits about 22% lower amounts of carbon dioxide than petrol.
One key advantage auto LPG has over CNG is that LPG can be retrofitted on two-wheelers, which are a major culprit for urban air pollution and particulate matter emissions.