GST and Natural Gas: A Step Towards Cleaner Energy

𝟭. 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀: The Indian government is ‘cautiously optimistic’ about bringing natural gas under the Goods and Services Tax (GST) regime in 2024-25, says Petroleum Secretary Pankaj Jain.

Jain believes that including natural gas in the GST regime will accelerate the shift towards this cleaner energy source.

𝟮. 𝗧𝗵𝗲 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: Domestic taxes on natural gas are still a work-in-progress, which is affecting its use case. The government is optimistic about resolving the GST issue this year.

𝟯. 𝗧𝗵𝗲 𝗣𝗿𝗼𝗰𝗲𝘀𝘀: As India is a federal country, this involves negotiations with states and persuading them to come on board. The government is working on this and expects to make substantial progress during the course of the year.

𝟰. 𝗧𝗵𝗲 𝗜𝗺𝗽𝗮𝗰𝘁: If natural gas is brought under GST, the switch from less clean fuels to natural gas will start to make economic sense, not just moral sense.

𝟱. 𝗖𝘂𝗿𝗿𝗲𝗻𝘁 𝗦𝘁𝗮𝘁𝘂𝘀: 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.

𝟲. 𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁𝘀: With all other elements like infrastructure, distribution, and pipelines in place, taxation is the final element yet to fall into place for a broader adoption of natural gas. #GST #NaturalGas #CleanEnergy #TaxReform