Excise duty slash proposed for clean fuel vehicles

NEW DELHI: Giving a push to promote use of alternative and 100% clean fuel in transport, the road transport ministry is proposing for major reduction in excise tax for vehicles using such fuel in the next budget. It wants no excise tax on electric vehicles and those run on other clean fuels, and only 2% for hybrid vehicles.

At present, the excise tax for such vehicles ranges between 6% and 8%. Government sources said the ministry is batting for major cut to promote use of clean fuel in mass transport and other mode as well. They added such incentive would encourage manufacturing of such vehicles in the country at a time government is campaigning for 'Make in India' and would also reduce India's import bill on account of crude oil.

While there are technologies like running personal vehicles and buses on 100% ethanol and electricity, hybrid vehicles can use both diesel or patrol and electricity. The main advantages of a hybrid vehicle are that it uses less fuel and emits less CO2 than other vehicles.

Road transport minister Nitin Gadkari had told Lok Sabha last week that his ministry is taking a slew of measures to use non-polluting fuel and also to introduce hybrid buses that can run on both diesel and electricity or CNG and electricity.

Already the government has published draft notification for allowing vehicles to run on bio-ethanol and bio-CNG. This will be finalized in one month and it will help expeditious introduction of the new and cleaner technology.

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