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Current Affairs

Natural gas under GST

Date: 28 October 2020 Tags: Miscellaneous

Issue

Global energy majors have called on the government to bring natural gas under the GST regime as natural gas market is witnessing growth.

 

Background

Currently petrol, diesel, aviation turbine fuel, natural gas, and crude oil fall outside India’s Goods and Services Tax (GST) regime. 

 

Details

  • Government officials have also indicated that the government is considering bringing natural gas under the ambit of the GST regime.

  • Experts have argued that bringing natural gas under the GST would lead to a reduction in the cascading impact of taxes on industries such as power and steel, which used natural gas as an input.

  • The inclusion of natural gas under the GST regime would do away with the central excise duty and different value added taxes imposed by states.

  • This would lead to an increase in the adoption of natural gas in line with the government’s stated goal to increase the share of natural gas in the country’s energy basket from 6.3% to 15%.

  • GST was a welcome federal initiative to ease trade and it will be good if natural gas is included in that as the current regime India was a complex market, with 29 markets within itself (because of differences in state laws).