Economy

Pre-Budget Memorandum: Industry Body Asks to Bring Natural Gas under GST Ambit

The Federation of Indian Petroleum Industry (FIPI) has asked the Indian Government to bring natural gas under Goods and Services Tax (GST). The federation stated that it would help realise the Hon’ble Prime Minister vision for a gas-based economy and raise the share of the environment-friendly fuel in India’s energy basket.

The natural gas is currently outside the ambit of GST, and the taxes such as central excise duty, central sales tax and the state Value-Added Tax (VAT) are being levied on the fuel.

The federation informed that the non-inclusion of natural gas under GST hurt its prices due to the stranding of taxes in gas producers/suppliers’ hands. It is also impacting natural gas-based industries due to stranding of legacy taxes paid on it.

The FIPI submitted a pre-budget memorandum to the finance ministry on behalf of oil and gas spectrum. The federation pointed out that the VAT rate on natural gas is very high in a few states. For example, it is 15% in Gujarat, 14.50% in Uttar Pradesh and Andhra Pradesh, and it is 14% in Madhya Pradesh.

Also Read: 2021 Union Budget to Go Paperless This Year

The federation also stated that the VAT paid on natural gas purchases is not available to the gas-based industries as Input Tax Credit (ITC). It increases the cost of production of industrial consumers and would have an inflationary effect on the economy.

The federation hoped that the inclusion of natural gas in GST would positively impact gas-based industries, increase fuel usage, and avoid taxes.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

Share

Recent Posts

Mutual Funds: SIP Inflows Breach Rs 19,000-Crore Mark for the First Time in February ’24

The systematic investment plan (SIP) contribution in February 2024 has crossed a new milestone. The monthly contribution tipped at Rs…

8 months ago

Income-Tax Return: A Brief Note on Annual Information Statement (AIS)

The Income-Tax (I-T) Department has directed taxpayers to access the Annual Information Statement (AIS) via the e-filing official portal and…

8 months ago

Mutual Funds: All About SIP and Market Fluctuations

Considering the vagaries of the stock market, investors often ponder over reevaluating their strategies. Whether to continue to remain invested…

8 months ago

Income-Tax Saving Through Strategic Life Insurance Planning

Financial planning is beyond just investing wisely to save on taxes; it's also related to protecting oneself and one's loved…

8 months ago

Income-Tax Return: Here’s a Note on Tax-Saving Avenues

A salaried individual earning up to Rs 5-15 lakh as net salary on an annual basis must first take stock…

8 months ago

A Quick Take on Equity-Linked Savings Scheme

Equity-linked savings schemes (ELSS), also referred to as tax-saving schemes, are equity funds that invest a significant portion of their…

8 months ago