Budget 2022 | Bring natural gas under GST to realise PM Modi#39;s vision of gas-based economy: Industry

Budget 2022 | Bring natural gas under GST to realise PM Modi#39;s vision of gas-based economy: Industry

The government should bring natural gas under the Goods and Services Tax (GST) regime to realise 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, an industry body that represents the likes of Reliance Industries as well state-owned firms, 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.

In its pre-Budget memorandum to the finance ministry, Federation of Indian Petroleum Industry (FIPI), which boasts of members from across the oil and gas spectrum, also demanded rationalization of GST on transportation of natural gas through pipeline as well as on re-gasification of imported LNG to help bring down cost of the environment friendly fuel.

The Prime Minister has set a target of raising the share of natural gas in the country’s primary energy basket to 15 per cent by 2030, from 6.2 per cent currently.

Greater use of natural gas will cut fuel cost as well as bring down carbon emissions, helping the nation meet its COP-26 commitments.

"Non-inclusion of natural gas under the GST regime is having adverse