The Union government should moderate the excise duty it levies on CNG till such time that the environment-friendly natural gas is included in the one-nation-one-tax GST regime, Kirit Parikh Committee has recommended.
Natural gas is currently outside the ambit of GST, and existing legacy taxes — central excise duty, state VAT and central sales tax — continue to be applicable on the fuel.
While the central government does not levy excise duty on natural gas when sold in gaseous form, it charges a 14 per cent tax on compressed natural gas (CNG). States levy VAT as high as 24.5 per cent on gas.
