MHI seeks lower GST on CNG 2-wheelers

A reduction in tax rates on CNG two-wheelers is likely to boost demand

- Manas Pimpalkhare & Rituraj Baruah

The ministry of heavy industries (MHI) has called on the finance ministry to lower goods and services tax (GST) rate on two-wheelers powered by compressed natural gas (CNG), two people aware of the development said.

"Currently, CNG two-wheelers attract a 28% levy under the goods and service tax regime, and the heavy industries ministry has suggested to the Union finance ministry for this levy to be reduced to an appropriate level," said one of the two persons cited earlier, both of whom spoke on the condition of anonymity.

The MHI's suggestion comes just ahead of the Union Budget 2025.

A reduction in tax rates on compressed natural gas two-wheelers is likely to boost demand for such vehicles, curbing carbon emissions that are held responsible for global warming with catastrophic consequences.

Queries emailed to the ministries of heavy industries and finance had not elicited a response till press time.