The government should bring natural gas under the goods and services tax (GST) regime to realize Prime Minister Narendra Modi’s vision for a gas-based economy and raising the share of the environment-friendly fuel in India’s energy basket, the industry has said.
Natural gas is currently outside the ambit of GST, and existing legacy taxes—central excise duty, state VAT, central sales tax—continue to be applicable on the fuel.
“Non-inclusion of natural gas under GST regime is having adverse impact on its prices due to stranding of taxes in the hands of gas producers/suppliers and is also impacting natural gas-based industries due to stranding of legacy taxes paid on it,” the Federation of Indian Petroleum Industry (FIPI) said.
