Lok Sabha Question No. 1951 (UNSTARRED), answered on 2023-12-14
Subject: Tax on Diesel Vehicles
Ministry: ROAD TRANSPORT AND HIGHWAYS
Asked by: Manne Srinivas Reddy

## GOVERNMENT OF INDIA MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## LOK SABHA UNSTARRED QUESTION NO. 1951

## ANSWERED ON 14 TH  DECEMBER, 2023

## TAX ON DIESEL VEHICLES

1951.  SHRI MANNE SRINIVAS REDDY:

## Will the Minister of ROAD TRANSPORT AND HIGHWAYS

सड़क परिवहन औि िाजमार्ग मंत्री

## be pleased to state:

- (a) whether the Government propose an additional ten per cent tax on diesel vehicles and warned automakers of even higher levies to force them away from diesel-burners and cut fuel emissions and pollution and if so, the details thereof;
- (b) whether  India  currently  imposes  twenty  eight  per  cent  tax  and additional socalled 'cess' is levied depending on the vehicles' engine capacity and if so, the details thereof; and
- (c) the details of the steps taken to vary and shift the production planning process of automakers?

## ANSWER

## THE MINISTER OF ROAD TRANSPORT AND HIGHWAYS

(SHRI NITIN JAIRAM GADKARI)

- (a) No such proposal is under consideration with this Ministry at present.
- (b)  The  GST  rates  on  different  types  of  motor  vehicles  as  per  MoF notification No. 01/2017-Intergrated Tax (Rate) dated 28.06.2017 are as under:

| Sl. No. of Chapter/heading/sub-                  | Sl. No. of Chapter/heading/sub-   |                                                                                                                                                                                                                         | GST   |
|--------------------------------------------------|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|
| notification No. 01/2017- Intergrated Tax (Rate) | heading/tariff item               | Description                                                                                                                                                                                                             | Rate  |
| 163A (Schedule- IV)                              | 8701                              | Road tractors for semi- trailers of engine capacity more than 1800 cc]                                                                                                                                                  | 28%   |
| 164 (Schedule- IV)                               | 8702                              | Motor vehicles for the transport of ten or more persons, including the driver [other than buses for use in public transport, which exclusively run on Bio-fuels]                                                        | 28%   |
| 165 (Schedule- IV)                               | 8703                              | Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars [other than Cars for physically handicapped persons] | 28%   |
| 166. (Schedule- IV)                              | 8704                              | Motor vehicles for the transport of goods [other than refrigerated motor vehicles]                                                                                                                                      | 28%   |

The compensation cess rate is dependent upon the type of vehicle and is prescribed in Sl No. 42 to 52B  of MoF  notification No. 01/2017Compensation Cess (Rate) dated 28.06.2017. The relevant entries are as under:

|   Sl.No of notific ation | Chapter/hea ding/sub- heading/tarif f item                                                                                                    | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | CC rate   |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                       42 | 8702 10, 8702 20, 8702 30, 8702 90                                                                                                            | Motor vehicles for the transport of not more than 13 persons, including the driver, other than the vehicles of the description mentioned in S. No. 50 and 51                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 15%       |
|                       43 | 8702 or 8703Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from | 8702 or 8703Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Nil       |
|                       44 | 8703 10 10, 8703 80                                                                                                                           | Electrically operated vehicles, including three wheeled electric motor vehicles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | NIL       |
|                       45 | 8703                                                                                                                                          | Three wheeled vehicles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | NIL       |
|                       46 | 8703                                                                                                                                          | Cars for physically handicapped persons, subject to the following conditions: Following motor vehicles of length not exceeding 4000 mm, namely: - (a) Petrol, Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven vehicles of engine capacity not exceeding 1200 cc; and (b) Diesel driven vehicles of engine capacity not exceeding 1500 cc for persons with orthopedic physical disability, subject to the condition that an officer not below the rank of Deputy Secretary to the Government of India in the Department of Heavy Industries certifies that the said goods shall be used by the persons with orthopedic physical disability in accordance with the | NIL       |

| Sl.No of notific ation   | Chapter/hea ding/sub- heading/tarif f item   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | CC rate   |
|--------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
| (Rate) 47                | 8703 40, 8703 60                             | Following Vehicles, with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion; a. Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such motor vehicles b. Three wheeled vehicles c. Motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm d. Motor vehicles other than those mentioned at (a), (b) and (c) above. Explanation .- For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 NIL NIL 15% | NIL       |
| 48.                      | 8703 50, 8703 70                             | (59 of 1988) and the rules made there under. Following Vehicles, with both compression- ignition internal combustion piston engine [diesel-or semi diesel] and electric motor as motors for propulsion; a. Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such motor vehicles b. Three wheeled vehicles                                                                                                                                                                                                                                                                   | NIL NIL   |

| Sl.No of notific ation   | Chapter/hea ding/sub- heading/tarif f item   | Description                                                                                                                                                                                                                                                                                                                                                           | CC rate   |
|--------------------------|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                          |                                              | c. Motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm d. Motor vehicles other than those mentioned at (a), (b) and (c) above. Explanation .- For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under.     | NIL 15%   |
| 49.                      | 8703                                         | Hydrogen vehicles based on fuel cell tech and of length not exceeding 4000 mm. Explanation. - For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under.                                                                                             | NIL       |
| 50.                      | 8702, 8703 21 or 8703 22                     | Petrol, Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm. Explanation. - For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under. | 1%        |
| 51.                      | 8702, 8703 31                                | Diesel driven motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm. Explanation.- For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under.                                                                  | 3%        |

| Sl.No of notific ation   | Chapter/hea ding/sub- heading/tarif f item   | Description                                                                                                                                                                                                                                                                                                                                                                                                                         | CC rate   |
|--------------------------|----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
| 52.                      | 8703                                         | Motor vehicles of engine capacity not exceeding 1500 cc                                                                                                                                                                                                                                                                                                                                                                             | 17%       |
| 52A                      | 8703                                         | Motor vehicles of engine capacity exceeding 1500 cc other than motor vehicles specified against entry at S. No 52B                                                                                                                                                                                                                                                                                                                  | 20%       |
| 52B                      | 8703                                         | Motor vehicles known as Utility Vehicles, by whatever name called including Sports Utility Vehicles (SUV), Mult i Utility Vehicles (MUV), Multi-purpose vehicles (MPV) or Cross-Over Utility Vehicles(XUV), with engine capacity exceeding 1500cc ; Length exceeding 4000 mm and Ground Clearance of 170mm and above. Explanation: For the purpose of this entry, the Ground Clearance means ground clearance in unladen condition. | 22%       |
| 56                       | Any Chapter                                  | All goods other than those mentioned at S. Nos. 1 to 55 above                                                                                                                                                                                                                                                                                                                                                                       | Nil       |

(c) The production planning process is dependent on market requirements and alignment with regulatory requirements issued from time to time. This Ministry issues regulation to meet emission norms, safety standards and fuel  requirements  of  vehicles.  It  also  issues  notification  to  create  an enabling environment for manufacturers to introduce vehicles which are environment friendly.

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