The Indian Auto LPG Coalition (IAC) has urged the central government to reduce the goods and services tax (GST) on auto LPG from 18 per cent to 5 per cent.

The industry body pointed out that Andhra Pradesh’s recent reduction of Value-Added Tax (VAT) on natural gas from 24.5 per cent to 5 per cent has brought down CNG prices, which is expected to impact other clean automotive fuels like auto LPG.

“In light of this, the IAC, representing the auto LPG industry in India, has called upon the Central Government to provide a level playing field by reducing tax on auto LPG from 18 per cent to 5 per cent GST, aiming to ensure a fair and competitive market environment,” it said.

“Currently, around 330 million vehicles in the country operate on environmentally harmful liquid fuels. Auto LPG presents a compelling alternative to traditional gasoline and diesel fuels, offering a combination of environmental, economic, and operational benefits for vehicle owners and society as a whole,” IAC Director-General Suyash Gupta said.

Gupta commended the Ministry of Road Transport and Highways’ (MoRTH) recent proposed amendments to the Central Motor Vehicles Rules (CMVR) in an attempt to streamline regulations for vehicles retrofitted with Liquefied Petroleum Gas (LPG) kits.

The proposed amendment offers relief by extending the validity of approvals from three to six years. Nevertheless, vehicles will have to undergo supplementary performance tests to qualify for this extension, he added.

“This is a significant relief as the validity of type approvals has been extended. Industry expresses its gratitude to the Government of India and MoRTH for engaging with us,” Gupta said.

Auto LPG emits fewer pollutants compared to gasoline and diesel. Supportive measures for automotive LPG, such as reduced GST on conversion kits and the fuel itself, alongside standards in approvals for conversion kits can substantially advance the goal of cleaner mobility, IAC said.