Budget 2022: Goods and Services Tax to natural gas in order to realize Prime Minister Narendra Modi’s vision of making India a gas-based economy and increase the share of eco-friendly fuel in the country’s energy basket. ) should be brought within its scope. The demand was made on Wednesday by an industry body that represents government-owned companies along with Reliance Industries.
Natural gas is currently out of the purview of GST and is still subject to Central Excise Duty, State VAT, Central Sales Tax.
FIPI sent pre budget memorandum to the Finance Ministry
The Federation of India Petroleum Industries (FIPI), in its pre-budget memorandum sent to the Finance Ministry, has also sought to streamline the GST on the transportation of natural gas through pipelines as well as re-gasification of imported LNG (LNG), So that the cost of eco-friendly fuel can be reduced. FIPI includes companies from the oil and gas sector as members.
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The target is to increase the share of natural gas in the energy basket to 15%
The Prime Minister has set a target to increase the share of natural gas in the country’s primary energy basket to 15 per cent by 2030, from 6.2 per cent at present. Increased use of natural gas will reduce fuel costs as well as reduce carbon emissions, which will help the country meet its COP-26 commitments.
Many states charge more VAT
FIPI said, “Natural gas not included in the GST regime leads to higher taxes on gas producers and suppliers and adversely affects the prices of natural gas. This also affects the natural gas based industries.
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More VAT is levied on natural gas in many states. VAT on natural gas is 24.5 per cent in Andhra Pradesh, 14.5 per cent in Uttar Pradesh, 15 per cent in Gujarat and 14 per cent in Madhya Pradesh.
This is a pre-condition for setting up a gas exchange.
In order to encourage a uniform tax and free trade of natural gas across the country from tax anomalies, it is necessary to include natural gas in the GST. “This is one of the pre-determined conditions for the development of gas exchange in the country,” the industry body said.
FIPI said that non-inclusion of basic petroleum products like crude oil, natural gas, petrol, diesel and ATF in the GST regime is adversely affecting the sector.
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