The Indian Auto LPG Coalition (IAC) has called upon the Finance Ministry to lower the GST rate on auto LPG from the current 18% to 5%, aiming to combat illegal diversion and enhance affordability for consumers. Additionally, the industry body has urged for incentives to promote the production of auto LPG variants by Original Equipment Manufacturers (OEMs).

According to the Director General of IAC, auto LPG offers both environmental benefits and cost-effective solutions. Reducing GST and incentivizing OEMs to expand auto LPG variants, similar to those for electric vehicles (EVs), can facilitate wider adoption of this cleaner fuel, supporting India’s transition towards sustainable energy.

He emphasized the environmental advantages of auto LPG, highlighting its lower emissions of pollutants like particulate matter and nitrogen oxides compared to traditional fuels. This shift not only improves air quality but also aligns with global environmental commitments, positioning auto LPG as a significant contributor to India’s sustainability goals.

Currently, the high GST on auto LPG creates a disparity compared to heavily subsidized EVs, posing a barrier to its adoption among consumers and businesses. The coalition believes that with appropriate fiscal policies, auto LPG can play a pivotal role in reducing vehicle emissions and generating economic savings.