At present, flex-fuel vehicles are levied with a GST rate of 28 percent, a notable contrast to the 5 percent GST rate applicable on electric vehicles (EVs).
The Indian Sugar Mills Association (ISMA) has reached out to the Ministry of Road Transport & Highways (MoRTH) to revise the GST from the current 28 percent to 5 percent on flex-fuel vehicles to bring in parity with electric vehicles.
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ISMA, which is claimed to be one of India’s oldest industrial association, has been instrumental in the sugar export market since 1957. It says that while India has achieved the 10 percent ethanol blending target and is on track to achieve 20 percent blending by 2025-26, it is important to recognize the importance of flex-fuel vehicles and promote adoption by bringing in parity of taxation of them.
At present, flex-fuel vehicles are levied with a GST rate of 28 percent, a notable contrast to the 5 percent GST rate applicable on electric vehicles (EVs). This move will directly contribute to reducing country’s fuel bill while simultaneously curbing carbon emissions from the transportation sector.
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Aditya Jhunjhunwala, President, ISMA said, “Presently, FFVs are levied with a GST rate of 28%, a notable contrast to the 5% GST rate applicable to electric vehicles (EVs). We request parity in the GST rebate for FFVs, a move that will acknowledge ecological importance and empowers consumers to seamlessly embrace environmentally conscious choices without bearing disproportionate financial burdens. Offering tax deductions for FFVs could incentivise the adoption of eco-friendly vehicles, promoting a greener transportation choice.“
ISMA has also reached out to the Authe tomotive Research Association of India (ARAI), who are working towards development of anhydrous ethanol blends with gasoline, urging for a thorough exploration of the untapped potential inherent in E-100 hydrous ethanol blends. Taking inspiration from Brazil’s successful integration of such blends, India can envision an automotive landscape where cleaner fuel alternatives merge seamlessly, heralding a transformative era of sustainability.
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E100
The industry body says that there are manifold benefits of ethanol-based fuel are significant and far-reaching. These blends herald an epoch of environmental mindfulness, dramatically curtailing greenhouse gas emissions, lessening dependence on fossil fuels, and elevating air quality. This audacious step aligns harmoniously with the global energy transition narrative, positioning India as a guiding star in the realm of sustainable energy practices.
Ethanol’s inherent economic viability over traditional gasoline further strengthens its stature as a commendable alternative. The cost advantage of E-100 hydrous ethanol in comparison to fuel ethanol facilitates consumer-friendly pricing, catalysing a transition towards eco-conscious choices without imposing financial constraints.
Moreover, the production costs, both operational and capital, associated with E-100 (hydrous ethanol) are notably lower than those incurred in the production of fuel ethanol (anhydrous ethanol with 99.6% purity), the latter being used for blending with petrol. This economic advantage can subsequently be conveyed to consumers through lowered prices of ethanol-blended petrol.
