- Demand to bring gas under the ambit of Goods and Services Tax (GST)
- Presently natural gas is out of the purview of GST
- Natural gas is levied very high VAT in many states.
New Delhi. An industry body representing public sector companies, including Reliance Industries, has urged the government to bring natural gas under the ambit of the Goods and Services Tax (GST) in the upcoming budget.
The industry body said that natural gas should be brought under the purview of GST to realize Prime Minister Narendra Modi’s vision for a gas-based economy and to increase the share of eco-friendly fuel. Presently natural gas is out of the purview of GST. It is currently levied on Central Excise Duty, State VAT (Value Added Tax), Central Sales Tax. The Federation of Indian Petroleum Industry (FIPI), in its pre-Budget memorandum, has also sought rationalization of GST on transportation of natural gas through pipelines and conversion of imported LNG into gas.
FIPI said, non-inclusion of natural gas in the GST regime is adversely affecting the prices of natural gas. Gas producers/suppliers have to face various types of taxes. Very high VAT is levied on natural gas in many states. VAT on natural gas is 24.5 percent in Andhra Pradesh, 14.5 percent in Uttar Pradesh, 15 percent in Gujarat and 14 percent in Madhya Pradesh.
The industry body has demanded inclusion of petroleum products like crude oil, natural gas, petrol, diesel and ATF in the purview of GST at the earliest. It has also urged for reducing the import duty to make LNG competitive with the polluting liquid fuel. It is noteworthy that the Prime Minister has set a target to increase the share of natural gas in the country to 15 percent by 2030. Its present share is 6.2 percent. Increasing use of natural gas will reduce fuel costs. Also, there will be a reduction in carbon emissions.